What was the net loss for Stretch Zone, according to the provided table?
Stretch_Zone Franchise · 2025 FDDAnswer from 2025 FDD Document
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Statements of Cash Flows
| Year Ended | |
|---|---|
| December 31, |
| 2023 | 2022 | |
|---|---|---|
| Cash flows from operating activities: | ||
| Net loss | $ (13,663,363) | $ (16,997,533) |
| Reconciliation of net loss to net cash provided by | ||
| operating activities: | ||
| Depreciation expense | 6,977 | 6,531 |
| Bad debt expense | - | 8,351 |
| Amortization of celebrity endorsement | 97,297 | 106,650 |
| Amortization of contract asset | 6,167 | 3,700 |
| Amortization of debt issuance costs | 146,390 | - |
| Change in operating lease right-of use asset | 160,413 | 158,817 |
| UAR liability | 12,466,993 | 17,897,523 |
| (Increase) decrease in: | ||
| Accounts receivable | (243,840) | (494,155) |
| Contract asset | (27,750) | (37,000) |
| Due from/to related party, net | 27,016 | (24,089) |
| Furniture inventory | 26,051 | (51,091) |
| Prepaid expenses | (17,121) | 22,724 |
| Increase (decrease) in: | ||
| Accounts payable | 267,483 | (629) |
| Accrued expenses | 65,779 | 537 |
| Deferred revenue | 3,692,827 | 5,017,476 |
| Operating lease liability | (161,310) | (135,227) |
| Net cash provided by operating activities | 2,850,009 | 5,482,585 |
| Cash flows from investing activities: | ||
| Property and equipment purchases | - | (32,380) |
| Net cash used in investing activities | - | (32,380) |
| Cash flows from financing activities: | ||
| Debt issuance costs | (972,564) | - |
| Proceeds from term note | 40,000,000 | - |
| Contribution from member | 1,059,487 | - |
| Distributions to member and former member | (46,013,579) | (2,520,000) |
| Net cash used in financing activities | (5,926,656) | (2,520,000) |
| Net change in cash | (3,076,647) | 2,930,205 |
| Cash, beginning of year | 6,160,442 | 3,230,237 |
| Cash, end of year | $ 3,083,795 | $ 6,160,442 |
| Supplementary disclosure of cash flow information: | ||
| Cash paid for interest | $ 3,428,028 | $ - |
| Non-cash transactions: | ||
| Celebrity endorsement issued for Class |
Source: Item 3 — Franchisee/Debtor's Warranties. (FDD pages 263–364)
What This Means (2025 FDD)
According to Stretch Zone's 2025 Franchise Disclosure Document, the company experienced a net loss of $13,663,363 in 2023 and $16,997,533 in 2022. These figures reflect the financial performance of Stretch Zone Franchising, LLC over those two years. Net loss is a critical indicator of a company's financial health, representing the difference between total revenues and total expenses, where expenses exceed revenues.
For a prospective Stretch Zone franchisee, these figures highlight the importance of carefully reviewing the company's financial statements and understanding the factors contributing to these losses. While past performance is not necessarily indicative of future results, it is essential to assess the franchisor's strategies for improving profitability and ensuring long-term financial stability. Understanding the reasons behind these losses, such as investments in growth, marketing expenses, or other operational factors, can provide valuable insights.
Furthermore, the FDD reveals that Stretch Zone's financial statements were audited by EisnerAmper LLP, indicating an independent review of the company's financial records. This audit provides a level of assurance regarding the accuracy and reliability of the financial information presented. Potential franchisees should consider consulting with a financial advisor to thoroughly analyze Stretch Zone's financial performance and assess the potential risks and rewards associated with investing in the franchise.