What was the total stockholders' deficit for Southern Steer in 2023?
Southern_Steer Franchise · 2025 FDDAnswer from 2025 FDD Document
r 30, 2024 and 2023 BALANCE SHEETS
ASSETS
| 2024 | 2023 | ||
|---|---|---|---|
| Current assets: | |||
| Cash | $ 23,494 | $ 43,717 | |
| Accounts receivable | 9,879 | 1,615 | |
| Accounts receivable, territory | - | 20,000 | |
| Due from related party | - | 3,500 | |
| Total current assets | 33,373 | 68,832 | |
| Total assets | $ 33,373 | $ 68,832 | |
| LIABILITIES AND STOCKHOLDERS' DEFICIT | |||
| Current liabilities: | |||
| Accounts Payable | $ 250 | $ | - |
| Accrued expenses | 7,449 | 7,759 | |
| Deferred revenues | 184,241 | 221,075 | |
| Line of credit | - | 249 | |
| Total current liabilities | 191,940 | 229,083 | |
| Total liabilities | 191,940 | 229,083 | |
| Stockholders' deficit: | |||
| Preferred Stock, $1,000 par value, 365 shares issued | |||
| and outstanding | 365,000 | - | |
| Contributed capital | 681,838 | 684,749 | |
| Accumulated deficiency | (1,205,405) | (845,000) | |
| Total Stockholders' deficit | (158,567) | (160,251) | |
| Total liabilities and Stockholders' deficit | $ 33,373 | $ 68,832 |
For the Years Ended September 30, 2024 and 2023 STATEMENTS OF INCOME AND STOCKHOLDERS' DEFICIT
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Source: Item 5 — and 7 of the FDD, Section 3.1 of the Franchise Agreement and Section 4.1 of the Multi-Unit Development Agreement are hereby amended to state that payment of the initial franchise fee and development fee will be deferred until We have satisfied Our pre-opening obligations, and You have commenced business operations. (FDD pages 168–290)
What This Means (2025 FDD)
According to Southern Steer's 2025 Franchise Disclosure Document, the total stockholders' deficit in 2023 was ($160,251). This figure is a key indicator of the company's financial health, representing the accumulated losses and deficits exceeding the total equity held by its stockholders.
For a prospective franchisee, a negative stockholders' equity can signal potential financial instability or challenges within the company. It suggests that the company's liabilities outweigh its assets. While not necessarily a deal-breaker, it warrants careful consideration and further investigation into the reasons behind the deficit and the franchisor's plans to address it.
It is important for potential franchisees to review the complete financial statements and consult with a financial advisor to fully understand the implications of the stockholders' deficit. This includes assessing the trend of the deficit over time, the company's strategies for improving its financial position, and the potential impact on the franchisee's investment and operations. Understanding the franchisor's financial stability is crucial for making an informed decision about investing in a Southern Steer franchise.