What is the amount of deferred revenue for open SBRs for Auntie Annes?
Auntie_Annes Franchise · 2024 FDDAnswer from 2024 FDD Document
ugh March 11, 2024, the date these consolidated financial statements were available for issuance, and determined that no subsequent event disclosures were required.
2 Revenue
The Company recognizes franchise revenues, Company SBR revenues, franchise and other rental revenues, and advertising funds revenues as the related performance obligations are satisfied.
The Company generally recognizes revenue associated with franchise and development fees of open SBRs over ti
Source: Item 23 — RECEIPTS (FDD pages 106–366)
What This Means (2024 FDD)
According to Auntie Anne's 2024 Franchise Disclosure Document, the deferred revenue for open SBRs (Small Business Retail) is $30,873 as of December 31, 2023. This deferred revenue represents payments Auntie Anne's has received but not yet recognized as earned revenue.
Deferred revenue typically arises from franchise fees paid upfront by franchisees. These fees are initially recorded as deferred revenue and then recognized as revenue over the term of the franchise agreement, which, according to other excerpts, is typically 10-20 years, commencing when the SBR is opened. The deferred revenue for open SBRs indicates the portion of these initial fees that Auntie Anne's has not yet recognized as revenue because the franchise agreements are still active.
For a prospective Auntie Anne's franchisee, this deferred revenue balance is an indicator of the financial health and stability of the franchise system. A substantial deferred revenue balance suggests that Auntie Anne's has a strong base of active franchisees and a steady stream of future revenue. It's important to note that this figure only reflects deferred revenue from open SBRs and does not include deferred revenue from unopened SBRs, which are accounted for separately.