What was the amount of deferred revenue at the beginning of 2024 for Beauty Bungalows?
Beauty_Bungalows Franchise · 2025 FDDAnswer from 2025 FDD Document
| 2024 | 2023 | |
|---|---|---|
| Deferred revenue - beginning of year | $ 214,600 | $ - |
Source: Item 23 — RECEIPTS (FDD pages 48–177)
What This Means (2025 FDD)
According to Beauty Bungalows' 2025 Franchise Disclosure Document, the deferred revenue at the beginning of 2024 was $214,600. This deferred revenue likely represents payments Beauty Bungalows received for franchise fees or other services that had not yet been earned as of the beginning of 2024.
Deferred revenue is a common accounting practice in franchising. It reflects the fact that initial franchise fees are typically recognized as revenue over the term of the franchise agreement, rather than entirely at the start. This is because the franchisor has an ongoing obligation to provide support and services to the franchisee throughout the term.
For a prospective Beauty Bungalows franchisee, this figure indicates the amount of revenue that Beauty Bungalows had already collected but not yet recognized as earned income at the start of 2024. It also shows that Beauty Bungalows had some initial success in selling franchises, as evidenced by the $214,600 in deferred revenue at the beginning of the year.