PRIMARY SOURCEBAM Franchising’s own audited financial statements
This is the plain-language version of the cited update, written to be read out loud. Every number in it comes from BAM’s own audited financial statements. Nothing here predicts that the company will fail, and everyone named is presumed to have acted lawfully.
Today is the biggest LEGO day of the year. Ninety-seven new sets dropped at once. So if you are a LEGO person, today is a day you might spend money, and it is a good day to pull out any Bricks and Minifigs gift card you have in a drawer and understand what is actually behind it. Because BAM files its own audited financial statements every year, and those numbers say something the company never says out loud. The thing keeping BAM standing is money it owes to other people.
Start with two numbers from their own audited books for 2025. They lost money, a net loss of about sixty-seven thousand dollars. And their net worth is below zero, negative six hundred and twenty-one thousand dollars, which means on paper they owe more than everything they own. Their auditors still signed off with the cleanest kind of opinion and no failure warning, so the company keeps running. The question is on what.
Here is the trick. When you buy a gift card, you hand the company cash today for stuff you will pick up later. Until you use it, they are holding your money. That is called float. Now look at their cash. On paper they brought in about three hundred and sixty-two thousand dollars of cash from running the business in 2025. Sounds fine. But almost all of it is the float growing. Gift-card balances went up by about three hundred and forty-four thousand. Other prepaid money, franchise and subscription fees paid in advance, went up another three hundred and twelve thousand. Pull the gift-card growth out, and the cash drops to about eighteen thousand. Pull both out, and it flips to negative two hundred and ninety-three thousand. So the healthy number is not the business. It is other people’s prepaid money piling up.
Watch what four years of their own audited books show. Gift cards they owe customers: a hundred and forty-six thousand in 2022, four hundred and seventeen thousand in 2023, six hundred and seventy-three thousand in 2024, and over a million dollars, one million and seventeen thousand, in 2025. It only goes up. Their net worth over those same four years only goes down. By the end of 2025 the gift cards alone, just over a million dollars, are bigger than their entire negative-net-worth hole. And a float like that only adds cash while it grows. The day people redeem cards faster than the company sells new ones, that line stops helping and starts draining. On their own 2025 numbers, if that gift-card line had simply gone flat, their operating cash falls to eighteen thousand. If it had gone the other way by the same amount, they are down around three hundred and twenty-five thousand for the year. Nothing else has to change. And a company with nothing in the bank behind it has nothing to catch the fall, because it already spent it.
First, a lot of what they call income has not actually come in as cash. In 2025 the money owed to BAM grew by six hundred and eleven thousand dollars, and a big chunk of it is owed by their own franchise stores, in unpaid royalties and in cash they advanced out to stores. So the top line leans more and more on IOUs from stores that are themselves struggling. Second, in the very same year they lost money and had negative net worth, they spent about sixty-one thousand dollars buying back their own stock, and they borrowed to do it. Buying back stock hands money to an owner on the way out. Doing that while you already owe more than you own just deepens the hole for everyone else you owe. Gift-card holders are on that list.
Here is the part that matters if you are holding one. A gift card is a debt the company owes you. It does not disappear when their money does. They can drain the gift-card account down to zero and still legally owe you every dollar. The catch is what kind of creditor you are if the company goes under. The federal gift-card law controls how long a card lasts and what fees they can charge, but it does not put a single dollar behind your card if the company fails. Unless a state makes them hold that cash in trust, it is just company money, already spent. And if they go under, gift-card holders are near the back of the line, a small protected amount and then an ordinary claim for the rest, the kind that usually gets back pennies. So a gift-card balance is worth full value only while the company is open and honoring it. That is the only time it is worth full value.
The gift-card money sits at corporate. BAM holds it centrally and makes every store run gift cards through the processor it picks. Which means the money on your card was collected up front, a long time ago, and they have been sitting on it since. So there is a real difference between spending a card you already hold and paying new cash. Using a card you already have spends money the company took long ago. Paying new cash hands them a fresh cut on top. What you do with a card you are owed is your call, and your money.
To be fair, and it matters. None of this is a prediction that BAM is going to fail, and none of it is financial advice. Their auditors gave a clean opinion and did not flag a failure risk. Negative net worth on the books is not the same as being broke tomorrow, and companies run that way for years. Gift cards and prepaid fees are normal things for any store to owe, and a rising gift-card balance also means cards are selling. Lending to your own franchisees and buying back stock are legal, ordinary moves, and they disclosed the buyback right there in the filing. Gift-card rules and who gets paid first in a bankruptcy change from state to state. Every number here is their own audited number, which is exactly why you can check it.
This is a plain-language retelling. The exact figures, the line items, and the law are in the full update, all of it from BAM’s own audited financial statements. Nothing here is a prediction or a finding.
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