What was the contract liability, net of current, for Aw as of December 31, 2023?
Aw Franchise · 2025 FDDAnswer from 2025 FDD Document
| ASSETS | ||
|---|---|---|
| YEARS ENDED DECEMBER 31 | ||
| 2023 | 2022 | |
| Assets | ||
| Cash | $ 4,705 | $ 33,561 |
| Due from franchisee | 7,837 | 1,226 |
| Due from related parties | 51,502 | 51,502 |
| Total Assets | $ 64,044 | $ 86,289 |
| LIABILITIES AND MEMBERS' EQUITY (DEFICIT) | ||
| Current Liabilities | ||
| Accounts payable and accrued expenses | $ — | $ 4,834 |
| Loan payable SBA | 513 | 476 |
| Loan payable WinTrust | 10,073 | 10,073 |
| Contract Liability | 8,000 | 8,250 |
| Total Current Liabilities | 18,586 | 23,633 |
| Long Term Liabilities | ||
| Loan payable S |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 39)
What This Means (2025 FDD)
According to Aw's 2025 Franchise Disclosure Document, the contract liability, net of current, as of December 31, 2023, was $17,500. This figure represents the portion of non-refundable franchise fees that Aw has received but not yet recognized as earned revenue. These fees are deferred and recognized over the life of the franchise agreement, in compliance with accounting standards for revenue recognition.
For a prospective Aw franchisee, this deferred revenue indicates Aw's obligation to provide services or fulfill other requirements as part of the franchise agreement. The contract liability reflects the unearned portion of the initial franchise fees. The net of current portion means that this liability is expected to be fulfilled beyond the coming year.
Reviewing the trend in contract liabilities over several years, as presented in the financial statements, can give potential franchisees insight into Aw's revenue recognition practices and financial obligations. It is important to understand how these liabilities are accounted for, as they impact Aw's reported financial performance and stability.