What was the amount of the change in deferred commissions for Antioch Pizza Shop in 2023?
Antioch_Pizza_Shop Franchise · 2025 FDDAnswer from 2025 FDD Document
330 | 218,330 | | Balances at December 31, 2023 | 1,000 | $ | 10 | $ | 6,810 | $ | 245,516 | $ 252,336 |
STATEMENTS OF CASH FLOWS
For the years ended December 31, 2024, 2023, and 2022
| 2024 | 2023 | 2022 | ||||
|---|---|---|---|---|---|---|
| Cash flows from operating activities | ||||||
| Net income | $ | 218,330 | $ | 35,383 | $ | 259,523 |
| Adjustments to reconcile net income to | ||||||
| net cash provided by operating activities: | ||||||
| Changes in operating assets and liabilities: | ||||||
| Accounts receivable | (22,400) | - | - | |||
| Inventory | (7,650) | - | - | |||
| Deferred commissions | 8,008 | (16,973) | - | |||
| Related party payable | - | - | (44,521) | |||
| Accounts payable | (2,199) | 6,383 | (10,856) | |||
| Deferred revenue | - | 10,000 | 25,000 | |||
| Net cash provided by operating activities | 194,089 | 34,793 | 229,146 | |||
| Cash flows from financing activities | ||||||
| Stockholder dividends | (15,510) | (85,889) | (430,179) | |||
| Net cash used in financing activities | (15,510) | (85,889) | (430,179) | |||
| Net change in cash and cash equivalents | 178,579 | (51,096) | (201,033) | |||
| Cash and cash equivalents at beginning of period |
Source: Item 21 — Financial Statements (FDD page 56)
What This Means (2025 FDD)
According to Antioch Pizza Shop's 2025 Franchise Disclosure Document, the change in deferred commissions in 2023 was a decrease of $16,973. This figure is derived from the cash flow statement, which reconciles net income to net cash provided by operating activities. The deferred commissions line item shows an adjustment of ($16,973) for 2023.
Deferred commissions represent commissions paid by Antioch Pizza Shop that are associated with franchise fees not yet recognized as revenue. This typically occurs when a franchisee has signed an agreement but has not yet opened their location. The decrease of $16,973 in 2023 suggests that Antioch Pizza Shop recognized more deferred revenue during that year than it deferred, effectively reducing the deferred commissions balance.
For a prospective franchisee, this information provides insight into Antioch Pizza Shop's accounting practices and revenue recognition. It also highlights the timing difference between cash outflows (commission payments) and revenue recognition, which is tied to franchisees commencing operations. Monitoring changes in deferred commissions can help franchisees understand the company's growth trajectory and the pace at which new locations are opening and generating revenue.