What was the ending members' deficit for Mr. Sandless at the end of 2021?
Mr_Sandless Franchise · 2025 FDDAnswer from 2025 FDD Document
enue | 62,270 | 50,270 | | | 62,714 | 65,609 | | Deferred revenue, net of current | 298,540 | 212,810 | | Members' (Deficit) | (203,056) | (76,192) | | Total Liabilities and Members' (Deficit) | $ 158,198 | $ 202,227 |
STATEMENTS OF OPERATIONS AND MEMBERS' (DEFICIT) MR. SANDLESS FRANCHISE, LLC
| YEARS ENDED DECEMBER 31 | ||
|---|---|---|
| 2022 | 2021 | |
| Revenues | ||
| Royalties | $ 685,356 | $ 596,025 |
| Franchise fees | 237,772 | 203,270 |
| Brand development fees | 121,257 | 120,449 |
| Materials | 208,782 | 110,000 |
| Other income | 16 |
Source: Item 21 — FINANCIAL STATEMENTS (FDD pages 41–42)
What This Means (2025 FDD)
According to Mr. Sandless's 2025 Franchise Disclosure Document, the ending members' deficit for the company at the end of 2021 was $(76,192). This figure represents the accumulated losses and distributions exceeding the members' contributions to the company up to that point in time.
For a prospective franchisee, this deficit indicates that Mr. Sandless had more liabilities than assets at the close of 2021. While not necessarily a sign of imminent failure, it does suggest that the company had not yet achieved sustained profitability and was relying on member contributions or other sources of financing to cover its operational losses.
It's important to note that a members' deficit can fluctuate from year to year depending on the company's financial performance, investment decisions, and distribution policies. A franchisee should review the trend in the members' deficit over several years, alongside other financial metrics, to gain a more comprehensive understanding of the company's financial health and stability. They should also inquire about the franchisor's plans to address the deficit and achieve long-term profitability.