What was the beginning cash balance for Pearce Bespoke at the start of 2024?
Pearce_Bespoke Franchise · 2025 FDDAnswer from 2025 FDD Document
| 60,463 | \$ | (502,101) | \$ | (441,638) |
PEARCE BESPOKE FRANCHISING, LLC STATEMENT OF CASH FLOWS YEAR ENDED DECEMBER 31, 2024
| 2024 | |
|---|---|
| CASH FLOWS FROM OPERATING ACTIVITIES | |
| Net (loss) | $ (22,237) |
| Adjustments to reconcile net income (loss) to net | |
| cash provided by operating activities: | |
| Amortization expense | 1,010 |
| Recognition of deferred commissions | 145,502 |
| Recognition of non-refundable deferred franchise fees | (872,417) |
| Changes in assets and liabilities | |
| Accounts receivable | (83,157) |
| Deferred commissions | (156,000) |
| Accounts payable and accrued expenses | 32,700 |
| Franchisee payable | 151,944 |
| Non-refundable deferred franchise fees | 433,500 |
| Net cash (used) by operating activities | (369,155) |
| CASH FLOWS FROM INVESTING ACTIVITIES | |
| Net cash (used) for investing activities | - |
| CASH FLOWS FROM FINANCING ACTIVITIES | |
| Member contributions | 52,583 |
| Proceeds from notes payable | 409,200 |
| Payments on notes payable | (242,818) |
| Advances to related party | - |
| Net cash (used) by financing activities | 218,965 |
| NET INCREASE (DECREASE) IN CASH | (150,190) |
| CASH, BEGINNING | 1 |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 39)
What This Means (2025 FDD)
According to Pearce Bespoke's 2025 Franchise Disclosure Document, the beginning cash balance at the start of 2024 was $170,147. The document provides a statement of cash flows for the year 2024, detailing cash from operating, investing, and financing activities. The net decrease in cash for the year was $(150,190). The cash balance at the end of the year was $19,957.
For a prospective franchisee, understanding the franchisor's cash flow is crucial. It provides insight into the financial stability and operational efficiency of Pearce Bespoke. A healthy beginning cash balance suggests that the company has sufficient funds to manage its day-to-day operations and invest in growth opportunities.
However, the decrease in cash during 2024 indicates that Pearce Bespoke used more cash than it generated during the year. This could be due to various factors, such as increased operating expenses, investments in new projects, or changes in working capital. It is important to investigate the reasons behind this decrease to assess whether it is a temporary situation or a sign of underlying financial issues. A potential franchisee should seek clarification from Pearce Bespoke regarding the factors contributing to the cash decrease and the strategies being implemented to improve cash flow in the future.
It is also worth noting that Pearce Bespoke maintains cash at a bank insured by the FDIC up to $250,000, but from time to time, amounts may exceed these limits. This is a common practice for businesses, but it's something for a franchisee to be aware of when assessing the overall financial risk.