What was the total amount of member distributions from Kidokinetics in 2022?
Kidokinetics Franchise · 2024 FDDAnswer from 2024 FDD Document
23, 2022, and 2021
| A | dditional | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Common Stock | Paid-in Members' | Retained | Total | ||||||||
| Shares | A | Mount | Capital | Interests | Earnings | Equity | |||||
| Balance at January 1, 2021 | 100 | $ | 1 | $ | 4,999 | $ | - | $ | (12,903) | $ | (7,903) |
| Conversion to LLC | (100) | (1) | (4,999) | 5,000 | - | - | |||||
| Member contributions | - | - | - | 422,077 | 422,077 | ||||||
| Net loss | - | - | (411,716) | (411,716) | |||||||
| Balance at December 31, 2021 | - | - | - | 427,077 | (424,619) | 2,458 | |||||
| Adoption of ASC 842, Leases | - | - | - | (1,015) | (1,015) | ||||||
| Member distributions | - | - | - | (20,691) | - | (20,691) | |||||
| Net loss | - | - | _ | (811,320) | _ | (811,320) | |||||
| Balance at December 31, 2022 | - | - | - | 406,386 | (1,236,954) | (830,568) | |||||
| Member distributions | - | - | - | - | (17,133) | (17,133) | |||||
| Net loss | - | - | - | (749,072) | (749,072) | ||||||
| Balance at December 31, 2023 | $ | - | $ | - | S | 406,386 | $ |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 59)
What This Means (2024 FDD)
According to Kidokinetics's 2024 Franchise Disclosure Document, member distributions in 2022 totaled $20,691. This figure is detailed in the statement of changes in members' equity. Member distributions represent payments made to the owners or members of the LLC, essentially representing a return of capital or profits. These distributions directly reduce the equity balance of the company.
For a prospective Kidokinetics franchisee, understanding member distributions is crucial because it provides insight into how the company manages its finances and allocates profits. While member distributions are not direct payments to franchisees, they reflect the financial health and decisions of the franchisor, which can indirectly impact the support and resources available to franchisees. A history of consistent and reasonable member distributions might indicate financial stability, but unusually large distributions could raise concerns about the company's long-term investment in the franchise system.
It's important to note that the member distributions are distinct from a franchisee's own potential profits. As a franchisee, your earnings will depend on your location's revenue, operating costs, and adherence to the Kidokinetics system. The franchisor's distributions reflect their internal financial structure and profit-sharing among members of the LLC, not the earnings potential of individual franchise units.
Reviewing the franchisor's financial statements over several years, including trends in member distributions, net income/losses, and retained earnings, can provide a more comprehensive understanding of the company's financial management practices. Prospective franchisees should seek clarification from Kidokinetics regarding any significant fluctuations or anomalies observed in these financial statements to ensure they fully understand the franchisor's financial health and its potential impact on the franchise system.