For the year ended December 31, 2024, what were Ledgers' operating losses?
Ledgers Franchise · 2025 FDDAnswer from 2025 FDD Document
CES, LLC (FORMERLY FIDE HOLDING, LLC) Notes to Financial Statement
NOTE 9 - PRIOR PERIOD ADJUSTMENT (Continued)
The effect of these restatement is to decrease members' equity as of January 1 as follows:
| Previously | As | |
|---|---|---|
| 2023 Restatement | Reported | Restated |
| Members' equity - January 1, 2024 | $1,374,619 | $1,155,501 |
| Notes Receivable | 792,878 | 40,760 |
| Deferred Revenue | 680,989 | 147,989 |
| Bad Debt Expense | 75,206 | 294,324 |
| Net loss | (287,482) | (506,600) |
NOTE 10 - GOING CONCERN CONSIDERATIONS
As of December 31, 2024, the Company had negative working capital of $468,670. For the year ended December 31, 2024, the Company had operating losses of $490,281 and negative operating cash flows of $471,328. Ma
Source: Item 22 — CONTRACTS (FDD page 46)
What This Means (2025 FDD)
According to Ledgers' 2025 Franchise Disclosure Document, for the year ended December 31, 2024, the company had operating losses of $490,281. Additionally, the company experienced negative operating cash flows of $471,328 during the same period. This indicates that Ledgers spent more money than it made through its core business activities.
This information is crucial for prospective franchisees as it provides insight into the financial health and stability of Ledgers. Significant operating losses and negative cash flows could suggest potential challenges in the franchisor's ability to support its franchisees or invest in the brand's growth. It's important to note that Ledgers' management has taken strategic measures to reduce personnel costs and maintain a cash reserve of $250,000 to support the company until new franchisee agreements become effective in May 2025. They also entered into a new strategic relationship with Bookkeeping Express, which is expected to generate new franchisee referrals.
Despite these losses, Ledgers' management believes that these strategic measures, cash reserves, and forecasted results for 2025 will allow the company to meet its liquidity needs within one year from the date the financial statements were available to be issued. However, prospective franchisees should carefully evaluate these factors and consider the potential risks associated with investing in a franchise that has recently experienced operating losses and negative cash flows. It would be prudent to inquire further about the specific details of the strategic measures being implemented and the expected impact of the Bookkeeping Express relationship on future revenue and profitability.
In summary, while Ledgers acknowledges the operating losses and negative cash flows, they express confidence in their ability to address these challenges through strategic initiatives. Potential franchisees should conduct thorough due diligence, including a detailed review of the company's financial statements and discussions with existing franchisees, to assess the viability and potential risks of investing in a Ledgers franchise.