What were the NAF advertising expenses for 360 Painting for the year ended December 31, 2023?
360_Painting Franchise · 2025 FDDAnswer from 2025 FDD Document
d by a taxing authority. The second step is to measure the tax benefit as the largest amount that is 50% likely of being realized upon settlement with a taxing authority. There were no amounts recorded as of December 31, 2024 or 2023 related to uncertain tax positions.
Advertising Costs
The Company administers national advertising funds (NAF) which are funded by the franchisees for which the associated revenue is recognized in franchise service fees on the consolidated statement of operations. The NAF pays for costs of preparing and producing various advertising and marketing materials for the franchisees. The NAF advertising expenses are recognized as incurred and are included in franchise support expenses on the consolidated statements of operations. NAF advertising expenses for the years ended December 31, 2024 and 2023 were $1,287,755 and $991,224, respectively.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 56)
What This Means (2025 FDD)
According to 360 Painting's 2025 Franchise Disclosure Document, the NAF (National Advertising Fund) advertising expenses for the year ended December 31, 2023, were $991,224. These expenses cover the costs of preparing and producing various advertising and marketing materials for 360 Painting franchisees. The funds are collected from franchisees, and the associated revenue is recognized as franchise service fees.
These NAF advertising expenses are recognized as incurred and are included in franchise support expenses on the consolidated statements of operations. This means that the advertising costs are recorded when they actually happen, rather than being spread out over a period of time.
In addition to NAF advertising expenses, 360 Painting also incurs non-NAF advertising expenses. These non-NAF advertising expenses for the year ended December 31, 2023, totaled $559,056. These expenses are recognized as incurred and included in franchise sales expenses on the consolidated statements of operations.