What was the balance of the Member's deficit for Moes Southwest Grill as of December 31, 2023?
Moes_Southwest_Grill Franchise · 2025 FDDAnswer from 2025 FDD Document
ts (cont'd)
(In thousands)
| December 29, | December 31, | |
|---|---|---|
| 2024 | 2023 | |
| Liabilities and Member's Deficit | ||
| Current liabilities: | ||
| Accounts payable | $ 5,320 | $ 8,395 |
| Accrued expenses and other liabilities | 81,587 | 75,840 |
| Income taxes payable | 3,851 | 7,620 |
| Advertising funds liabilities | 8,418 | 8,942 |
| Current portion of deferred revenue | 3,688 | 3,149 |
| Current portion of operating lease liabilities | 11,146 | 12,309 |
| Current portion of long-term debt | 11,200 | 9,950 |
| Total current liabilities | 125,210 | 126,205 |
| Long-term debt | 1, |
Source: Item 23 — Receipts (FDD pages 92–334)
What This Means (2025 FDD)
According to Moe's Southwest Grill's 2025 Franchise Disclosure Document, the Member's deficit as of December 31, 2023, was $(696,181). This figure represents the accumulated shortfall in the equity or net worth of the company from the member's perspective. It is important to note that this deficit does not necessarily indicate immediate financial instability but rather reflects the cumulative financial performance and transactions of the company up to that point in time.
Specifically, the FDD outlines several factors contributing to this deficit. These include cash proceeds retained from the exercise of the Parent's stock options ($257), share-based compensation expense ($4,983), cash distribution paid to Parent's shareholders ($162,487), and net income ($66,272). These items collectively influenced the change in the Member's deficit from December 25, 2022, to December 31, 2023. Understanding these components provides a clearer picture of the financial activities affecting the deficit.
For a prospective franchisee, this information is crucial for assessing the financial health and stability of Moe's Southwest Grill. While a deficit might raise concerns, it is essential to consider the context and the factors driving it. Franchisees should investigate the company's strategies for addressing the deficit and ensuring long-term financial sustainability. Consulting with a financial advisor to interpret these figures in relation to the overall franchise opportunity is highly recommended.