What was the amount of non-cash contribution of equity for Precision Door Service in 2023?
Precision_Door_Service Franchise · 2025 FDDAnswer from 2025 FDD Document
| For the years ended December 31, | 2023 | (Restated) 2022 |
|---|---|---|
| Operating activities | ||
| Net income | $ 166,470 $ | 138,944 |
| Adjustments to reconcile net income to net cash | ||
| provided by operating activities: | ||
| Depreciation and amortization | 97,290 | 82,921 |
| Bad debt expense | 2,283 | 2,035 |
| Notes received | (15,050) | (12,808) |
| Collections of notes receivable | 16,293 | 13,699 |
| Changes in assets and liabilities: | ||
| Trade accounts receivable | (464) | (8,183) |
| Inventories | 883 | (1,035) |
| Prepaid selling expenses and other assets | (11,464) | (9,491) |
| Accrued liabilities | 198 | 338 |
| Deferred revenue | 11,195 | 5,832 |
| Net cash provided by operating activities | 267,634 | 212,253 |
| Investing activities | ||
| Purchase of equipment and other assets | (2,893) | (7,904) |
| Purchase of intellectual property | - | (104,112) |
| Net cash used in investing activities | (2,893) | (112,016) |
| Financing activities | ||
| Equity contribution | - | 102,000 |
| Distributions paid | (265,744) | (202,999) |
| Net cash used in financing activities | (265,744) | (100,999) |
| Net decrease in cash and restricted cash | (1,003) | ( |
Source: Item 21 — Financial Statements (FDD page 91)
What This Means (2025 FDD)
According to Precision Door Service's 2025 Franchise Disclosure Document, the non-cash contribution of equity for the year 2023 was $101,756. This figure is part of the supplemental cash flow disclosures within the financial statements. In 2022, the non-cash contribution of equity was $14,670.
This non-cash contribution means that Precision Door Service received assets or services in exchange for equity, rather than receiving cash. For a potential franchisee, this indicates how the company is structured financially and how it obtains assets. It's important to note that non-cash contributions can impact the company's overall financial health and stability.
Understanding the nature of these contributions is crucial. In Precision Door Service's case, the non-cash contribution in January 2023 consisted of $99,349 in intangible assets, $3,600 in accounts receivable, $2,241 in property and equipment, $280 in inventories, and an unearned revenue liability, net of prepaid selling expenses, of $3,714. A prospective franchisee should investigate the details of these non-cash contributions to fully understand their implications.
Franchisees should consider how these non-cash contributions might affect the company's financial performance and stability. It is advisable to seek clarification from Precision Door Service regarding the specifics of these transactions and their potential impact on the franchise system.