What was the retained earnings for Spray Net at January 1, 2023?
Spray_Net Franchise · 2025 FDDAnswer from 2025 FDD Document
Commitment and Contingencies | (29,320) | (120,680) | 150000 | | Due to related parties | - | (76,268) | (35,934) | | Contract Liability | 737,647 | (221,397) | 1,792,931 | | Deferred income taxes | _ | _ | 5,470 | | Deferred convention revenue | _ | (35,790) | (5,932) | | Brand fund liability | | (80,280) | 933 | | Income tax payable | | | (24,000) | | | 61,755 | 27,783 | (210,425) | | | | | | | Cash Flows from Financing Activities: | | | | | Prior Period adjustment | _ | _ | (41,113) | | | | | | | | | | | | Net Increase in Cash | 61,755 | 27,783 | (251,538) | | | | | | | Cash - Beginning of year | 81,473 | 53,690 | 305,228 | | | | | | | Cash - End of year | $ 143,228 | $ 81,473 | $ 53,690 |
| | nmon | Pa | litional nid in npital | Retained Earnings | 1 | Total | |---------------------------------------------------
Source: Item 23 — RECEIPTS (FDD pages 75–219)
What This Means (2025 FDD)
According to Spray Net's 2025 Franchise Disclosure Document, the retained earnings at January 1, 2023, were reported as a deficit of $816,921. This figure reflects the cumulative profits or losses that Spray Net has accumulated and retained in the business up to that point in time.
For a prospective Spray Net franchisee, this information provides insight into the financial health and historical profitability of the company. A negative retained earnings balance suggests that the company has experienced cumulative losses exceeding its profits, which could be a point of concern. However, it's essential to consider this figure in conjunction with other financial metrics and trends to gain a comprehensive understanding of the company's financial stability.
It is important to note that retained earnings can be influenced by various factors, including net losses, dividend payouts, and accounting adjustments. Therefore, a prospective franchisee should investigate the reasons behind the negative retained earnings and assess the company's strategies for improving its financial performance. Consulting with a financial advisor to analyze the complete financial statements and understand the implications of this figure is advisable before making any investment decisions regarding a Spray Net franchise.