How much deferred franchise revenue did Annex Brands report in 2024?

According to Annex Brands' 2025 Franchise Disclosure Document, the deferred revenue associated with initial franchise fees as of September 30, 2024, was $437,000. This deferred revenue represents the portion of initial franchise fees that Annex Brands has not yet recognized as earned revenue.

In accounting terms, deferred revenue is a liability on Annex Brands' balance sheet. It signifies that Annex Brands has received payment for services (in this case, franchise rights and pre-opening support) that it is obligated to provide in the future. As Annex Brands fulfills its obligations under the franchise agreement, such as providing training and support, it will recognize portions of this deferred revenue as earned revenue on its income statement.

For a prospective Annex Brands franchisee, this figure provides insight into the company's financial stability and revenue recognition practices. It indicates the amount of revenue that Annex Brands anticipates recognizing in the future from existing franchise agreements. Monitoring the trend of deferred revenue over time can help a franchisee understand the company's growth and its ability to generate future revenue streams.

The FDD also lists the deferred revenue for 2023 and 2022, which were $396,000 and $262,000, respectively. This shows an increase in deferred revenue year-over-year, which could indicate increased franchise sales.