What was the amount of the change in deferred revenue for Antioch Pizza Shop in 2022?
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 deferred revenue increased by $25,000 in 2022. Deferred revenue represents payments Antioch Pizza Shop receives for services or products that have not yet been delivered or provided. In the case of Antioch Pizza Shop, this typically relates to franchise fees received from franchisees who have not yet opened their locations.
The increase in deferred revenue suggests that Antioch Pizza Shop collected more franchise fees in 2022 than it recognized as earned revenue. This can happen when new franchise agreements are signed and initial fees are paid, but the corresponding restaurants are not yet operational. The deferred revenue is recognized as earned revenue once the franchisee commences operations.
For a prospective Antioch Pizza Shop franchisee, this deferred revenue information provides insight into the company's financial health and growth trajectory. An increasing deferred revenue balance can indicate strong franchise sales and future revenue potential. However, it's important to also consider the rate at which Antioch Pizza Shop converts deferred revenue into recognized revenue, as delays in restaurant openings can impact the timing of revenue recognition.