What was the amount of Apricot Lane's deferred revenue at the end of 2023?
Apricot_Lane Franchise · 2025 FDDAnswer from 2025 FDD Document
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NOTE 5 - FRANCHISE FEES RECEIVABLE AND DEFERRED FRANCHISE FEES
Franchise fees totaling $222,000 and $207,000 were receivable at December 31, 2024 and 2023 respectively. Franchise fees received as income from new store openings in 2024 and 2023 were $732,500 and $994,000 respectively. In accordance with the Company's accounting policy described in Note 1, recognition of such fees as revenue is deferred until the store opens. As a result, the Company had
Source: Item 23 — RECEIPTS (FDD pages 51–222)
What This Means (2025 FDD)
According to Apricot Lane's 2025 Franchise Disclosure Document, the company had $627,500 in deferred revenue as of December 31, 2023. Deferred revenue represents franchise fees that Apricot Lane has received but not yet recognized as income.
This deferred revenue stems from franchise fees collected from new store openings. In 2023, Apricot Lane received $994,000 in franchise fees from new store openings. However, according to the company's accounting policy, these fees are only recognized as revenue once the store actually opens. Until that time, the revenue is deferred.
For a prospective Apricot Lane franchisee, this deferred revenue figure provides insight into the company's financial practices and revenue recognition policies. It also highlights the importance of understanding the conditions under which franchise fees are recognized as income, as this can impact the franchisor's reported financial performance.