What was the accumulated deficit for Ledgers on December 31, 2023 (Restated)?
Ledgers Franchise · 2025 FDDAnswer from 2025 FDD Document
) | | (82,735) | | (6,284) | | Other income | | = | | (115,395) | | 554 | | Other expense | | 485 | | 4,014 | | 3,246 | | Total other (income) expense | (2 | 24,290) | | (194,116) | _ | (2,484) | | Loss before income taxes | (4 | 65,991) | | (604,600) | | (600,527) | | Income tax benefit | (1 | 04,000) | | (98,000) | , | (153,000) | | Net loss | $ (30 | 61,991) | $ | (506,600) | $ | (447,527) |
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Statements of Changes in Members' Equity
For the Years Ended December 31, 2024, 2023, and 2022
| | Capital Contributions | Accumulated Deficit | Total | |----------------------
Source: Item 22 — CONTRACTS (FDD page 46)
What This Means (2025 FDD)
According to Ledgers' 2025 Franchise Disclosure Document, the accumulated deficit as of December 31, 2023 (Restated) was $(2,044,499). This figure represents the total losses Ledgers has incurred over its lifetime, which have not been offset by profits. The restatement indicates that this figure has been adjusted to reflect corrections of prior accounting errors.
For a prospective franchisee, an accumulated deficit of this magnitude can signal potential financial instability within the franchise system. It suggests that Ledgers has been operating at a loss, which could impact its ability to support franchisees, invest in system improvements, or maintain brand standards. This deficit is a critical factor to consider when evaluating the financial health and sustainability of the Ledgers franchise opportunity.
It is important to note that the 2023 financial statements were restated due to a misstatement, as detailed in Note 9 of the financial statements. This restatement involved correcting balances for a note receivable and deferred revenue related to a terminated franchise agreement. The restatement resulted in recording $219,118 in bad debt expense for the year ended December 31, 2023, and removing a $752,118 note receivable and $533,000 deferred revenue balances at December 31, 2023. This restatement decreased members' equity as of January 1.
Given the accumulated deficit and the need for restatement, a prospective Ledgers franchisee should conduct thorough due diligence. This includes carefully reviewing the audited financial statements, understanding the reasons for the restatement, and assessing the franchisor's plans to address the financial challenges. It would also be prudent to seek advice from a financial advisor and legal counsel to fully understand the risks and potential rewards associated with investing in a Ledgers franchise.