What was the amount of advances to/borrowings from related parties for Ledgers in 2023?
Ledgers Franchise · 2025 FDDAnswer from 2025 FDD Document
,914 | | Net loss | | (447,527) | (447,527) | | Balances, December 31, 2022 | 3,200,000 | (1,495,613) | 1,704,387 | | Adoption of Topic 326 | | (42,286) | (42,286) | | Net loss (Restated) | | (506,600) | (506,600) | | Balances, December 31, 2023 (Restated) | 3,200,000 | (2,044,499) | 1,155,501 | | Net loss | | (361,991) | (361,991) | | Balances, December 31, 2024 | $ 3,200,000 | $ (2,406,490) | $ 793,510 |
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Statements of Cash Flow
For the Years Ended December 31, 2024, 2023, and 2022
| 2024 | 2023 | 2022 | |||
|---|---|---|---|---|---|
| Cash flows from operating activities: | J.S | ||||
| Net loss | $ | (361,991) | $ (506,600) | $ | (447,527) |
| Adjustments to reconcile net loss to net cash | |||||
| used in operating activities: | |||||
| Change in allowance for credit losses | = | 67,468 | - | ||
| Write off of notes receivable, net of | |||||
| deferred revenue | 46,310 | 226,854 | = | ||
| Accrued interest income | (5,550) | (72,480) | (5,718) | ||
| Benefit from income taxes | (104,000) | (98,000) | (153,000) | ||
| (Increase) decrease in: | × (3) | ||||
| Royalty receivables | 112 | (3,302) | - | ||
| Notes receivable | = | 11,929 | 1,252 | ||
| Increase (decrease) in: | |||||
| Accounts payable | æ | (110,964) | 6,410 | ||
| Accrued expenses | (5,220) | 4,823 | (3,362) | ||
| Deferred revenue | (40,989) | (113,362) | (114,383) | ||
| Net cash used in operating activities | (471,328) | (593,634) | (716,328) | ||
| Cash flows from investing activities: | |||||
| (Advances to) borrowings |
Source: Item 22 — CONTRACTS (FDD page 46)
What This Means (2025 FDD)
According to Ledgers' 2025 Franchise Disclosure Document, in 2023, the amount of advances to or borrowings from related parties was $510,300. This figure reflects the net cash flow resulting from transactions with parties related to Ledgers, such as its owners, affiliates, or subsidiaries. A positive value indicates that Ledgers received more in advances or borrowed more from related parties than it provided to them.
For a prospective franchisee, this related-party activity is an important indicator of Ledgers' financial management and relationships. Significant advances from related parties might suggest that Ledgers relies on these sources for funding its operations. Conversely, lending to related parties could indicate the use of company funds for purposes outside of the core business.
It is essential for potential franchisees to investigate the nature of these related-party transactions. Understanding the terms, interest rates, and repayment schedules associated with these advances or borrowings can provide insight into the financial stability and practices of Ledgers. Furthermore, franchisees should assess whether these transactions are conducted at arm's length and are beneficial to the company's overall financial health.
Franchisees should seek clarification from Ledgers regarding the purpose and impact of these related-party transactions. Consulting with a financial advisor can also help in evaluating the potential risks and benefits associated with these transactions and their implications for the franchise investment.