What were the total liabilities and member's deficit for Stretch Zone as of December 31, 2023?
Stretch_Zone Franchise · 2025 FDDAnswer from 2025 FDD Document
Beach, Florida
April 29, 2024
Balance Sheets
| December 31, | |||
|---|---|---|---|
| 2023 | 2022 | ||
| ASSETS | |||
| Current assets: | |||
| Cash | $ 3,083,795 | $ 6,160,442 | |
| Accounts receivable | 883,442 | 639,602 | |
| Furniture inventory | 25,040 | 51,091 | |
| Due from related parties | 10,558 | 48,182 | |
| Contract asset | 6,475 | 3,700 | |
| Celebrity endorsement and marketing, net | 131,056 | 106,650 | |
| Prepaid expenses | 72,397 | 55,276 | |
| Total current assets | 4,212,763 | 7,064,943 | |
| Property and equipment, net | 27,989 | 34,966 | |
| Celebrity endorsement and marketing, net, long-term | 476,783 | 213,300 | |
| Contract asset, long-term | 48,408 | 29,600 | |
| Operating lease, right of use assets | 620,498 | 780,911 | |
| Security deposits | 36,155 | 36,155 | |
| Total assets | $ 5,422,596 | $ 8,159,875 | |
| LIABILITIES AND MEMBER'S DEFICIT | |||
| Current liabilities: | |||
| Accounts payable | $ 669,263 | $ 401,780 | |
| Accrued expenses | 75,203 | 9,424 | |
| Term note, current | 1,710,305 | - | |
| Deferred revenue, current | 1,360,541 | 1,395,170 | |
| Due to related party | 413 | 11,021 | |
| Operating lease liabilities, current | 182,981 | 161,310 | |
| UAR liability | - | 17,897,523 | |
| Total current liabilities | 3,998,706 | 19,876,228 | |
| Term note - long-term, net of debt issuance costs | 37,463,521 | - | |
| Operating lease liabilities, long-term | 504,830 | 687,811 | |
| Deferred revenue, long-term | 15,166,441 | 11,438,985 | |
| Total liabilities | 57,133,498 | 32,003,024 | |
| Commitments and contingencies (see Note I) | |||
| MEMBER'S DEFICIT |
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, as of December 31, 2023, the total liabilities were $57,133,498 and the member's deficit was ($51,710,902). This information is derived from the balance sheet included in the FDD. The balance sheet provides a snapshot of the company's assets, liabilities, and equity at a specific point in time.
The total liabilities represent the sum of all obligations that Stretch Zone owes to external parties, including accounts payable, accrued expenses, term notes, deferred revenue, amounts due to related parties, and operating lease liabilities. The member's deficit, on the other hand, represents the accumulated losses and distributions exceeding contributions from the owners of the company. A member's deficit is not necessarily indicative of poor performance, but rather the accumulated financial activity of the business.
For a prospective Stretch Zone franchisee, understanding these figures is crucial for assessing the financial health and stability of the franchisor. While a high level of liabilities isn't inherently negative, it's important to evaluate it in relation to the company's assets and revenue generation. Similarly, a member's deficit should be examined in the context of the company's overall financial history and future prospects. It is important to note that the total liabilities and member's deficit equal $5,422,596.