What was the total stockholder's deficit for Jersey Mikes in the earlier period presented in the table?
Jersey_Mikes Franchise · 2025 FDDAnswer from 2025 FDD Document
| Common stock (no par value, 104,000 shares authorized, | ||
|---|---|---|
| 100,000 shares outstanding) | 4 0,000 | 40,000 |
| Other comprehensive income | (25,662) | - |
| Retained deficit | (857,931,035) | (828,449,597) |
| Total stockholder’s deficit | (857,916,697) | (828,409,597) |
| TOTAL LIABILITIES AND STOCKHOLDER’S DEFICIT | $ 1,045,612,386 | $ 287,369,050 |
Source: Item 23 — RECEIPTS (FDD pages 77–421)
What This Means (2025 FDD)
According to Jersey Mike's 2025 Franchise Disclosure Document, the total stockholder's deficit for the earlier period presented in the table was $(828,409,597). This figure represents the cumulative losses and other equity reductions of Jersey Mike's that have not been offset by profits or contributions from stockholders.
A stockholder's deficit can arise when a company has incurred significant losses over time, reducing its retained earnings to a negative value. This can be a point of concern for potential investors or franchisees, as it indicates that the company's liabilities and obligations exceed its assets. However, it is important to consider the context and potential reasons for the deficit, such as significant investments in growth or temporary economic downturns.
For a prospective Jersey Mike's franchisee, this information is crucial for assessing the financial health and stability of the franchisor. While a stockholder's deficit does not necessarily indicate imminent failure, it warrants further investigation into the company's financial management, growth strategy, and plans for addressing the deficit. It is advisable to seek professional financial advice to fully understand the implications of this figure and its potential impact on the franchisee's investment.