What were the total operating expenses for Ledgers in 2023?
Ledgers Franchise · 2025 FDDAnswer from 2025 FDD Document
venue | 83,000 | 53,989 | 711,614 | | | | | | Total Non-Current Liabilities | 83,000 | 53,989 | 711,614 | | | | | | Total Liabilities | 978,945 | 910,154 | 1,257,740 | | | | | | Members' Equity: | | | | | | | | | Members' equity | 793,510 | 1,155,501 | 1,704,387 | | | | | | Total Members' Equity | 793,510 | 1,155,501 | 1,704,387 | | | | | | Total Liabilities and Members' Equity | $ 1,772,455 | $ 2,065,655 | $ 2,962,127 | | | | |
LOYALTY BUSINESS SERVICES, LLC (FORMERLY FIDE HOLDING, LLC) Statements of Operations
For the Years Ended December 31, 2024, 2023, and 2022
| 20 | 24 | - | 2023 | 2022 | ||
|---|---|---|---|---|---|---|
| Revenue: | ||||||
| Initial franchise fees | $ . | 30,336 | $ | 113,362 | $ | 114,383 |
| Royalty fees | í | 36,056 | 37,528 | 49,019 | ||
| Commission income | = | = | 21,000 | |||
| Other | 26,479 | - | 41,740 | 176,466 | ||
| Total revenue | 92,871 | 192,630 | 360,868 | |||
| Operating expenses: | ||||||
| Salaries, wages, taxes and benefits | 1 | 74,839 | 449,440 | 425,683 | ||
| Advertising and promotions | 2,750 | 9,910 | 19,784 | |||
| Corporate overhead expense | 1' | 75,805 | 109,334 | 58,370 | ||
| Franchise recruitment | 9 | 95,587 | 50,925 | 128,533 | ||
| Technology expense | 9,756 | 40,525 | 248,337 | |||
| Management fees | - | 15,000 | - | |||
| Professional fees | : | 84,627 | 13,327 | 61,406 | ||
| Bad debt expense | í | 35,657 | 294,324 | - | ||
| Other general and administrative e |
Source: Item 22 — CONTRACTS (FDD page 46)
What This Means (2025 FDD)
According to Ledgers's 2025 Franchise Disclosure Document, the total operating expenses for the company in 2023 were $991,346. These expenses encompass various costs associated with running the business, including salaries, wages, taxes, benefits, advertising, promotions, corporate overhead, franchise recruitment, technology, management fees, professional fees, bad debt, and other general and administrative expenses.
For a prospective Ledgers franchisee, understanding the breakdown of these operating expenses is crucial for financial planning and assessing the potential profitability of the franchise. Significant expenses such as salaries, wages, taxes, and benefits, which amounted to $449,440 in 2023, highlight the importance of efficient staffing and labor cost management. Similarly, costs related to franchise recruitment ($50,925 in 2023) and advertising ($9,910 in 2023) reflect the ongoing investment needed to grow the franchise network and attract clients.
It's also important to note that the FDD includes a note about prior period adjustments. Specifically, during the year ended December 31, 2023, the company's financial statements included balances for a note receivable and deferred revenue for a franchise agreement that was terminated in 2023 but not properly written off in 2023. During the year ended December 31, 2024, the company identified this error and restated its financial statements to properly recognize the termination of the franchise agreement recording $219,118 in bad debt expense for the year ended December 31, 2023 and removing the $752,118 note receivable, and $533,000 deferred revenue balances at December 31, 2023. This restatement affected the bad debt expense, which was $294,324 after the restatement.
Therefore, a potential franchisee should carefully review these expenses and consider how they might vary based on their specific location, market conditions, and business strategies. Understanding these costs is essential for developing a realistic financial model and ensuring the long-term success of their Ledgers franchise.