What was the net loss for Stretch Zone in the later year presented in the statement of cash flows?
Stretch_Zone Franchise · 2025 FDDAnswer from 2025 FDD Document
ng principles generally accepted in the United States of America ("U.S. GAAP").
[2] Liquidity:
For the year ended December 31, 2024, the Company incurred a net loss of approximately $2,679,000, used approximately $854,000 of cash in operations and at December 31, 2024 had a working capital deficit of approximately $1,106,000. Based on the Company's business plan, the Company believes its existing resources and cash flows projected to be generated from operations can satisfy its working capital requirements and obligations for at least the next 12 months from the date of issuance. However, if performance expectations fall short or expenses exceed expectations, the Company may need to reduce expenses or raise additional capital or financing to continue operations. Failure to do so would have a material adverse impact on its financial condition. There can be no assurance tha
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 approximately $2,679,000 for the year ended December 31, 2024. This loss contributed to Stretch Zone using approximately $854,000 of cash in operations during that same year. Additionally, as of December 31, 2024, Stretch Zone had a working capital deficit of approximately $1,106,000.
This information is crucial for potential franchisees as it provides insight into the financial health and stability of Stretch Zone. A significant net loss and working capital deficit could indicate potential financial challenges for the company. This may affect the level of support and resources Stretch Zone can provide to its franchisees.
However, the document states that Stretch Zone believes its existing resources and projected cash flows can satisfy its working capital requirements and obligations for at least the next 12 months from the date of issuance. Still, the document also cautions that if performance expectations are not met or expenses exceed expectations, Stretch Zone may need to reduce expenses or seek additional capital or financing. The availability of such capital or financing is not guaranteed, and failure to secure it could have a material adverse impact on Stretch Zone's financial condition.
Prospective franchisees should carefully consider these factors and conduct thorough due diligence, including consulting with financial advisors, to assess the potential risks and rewards of investing in a Stretch Zone franchise. Understanding the company's financial situation is essential for making an informed decision.