What is the nature of Beauty Bungalows' operations?
Beauty_Bungalows Franchise · 2025 FDDAnswer from 2025 FDD Document
1. Organization
Beauty Bungalows Franchising LLC (the "Company") is a Wyoming limited liability company formed in July 2021. The Company was formed for the purpose of franchising beauty stores nationally in the United States. The company has one member with 100% ownership.
For the years ended December 31, 2024, and 2023, total member contributions were $16,618 and $37,988, respectively and total member distributions were $0 and $60,000, respectively.
Below is the summary of agreements during the years ended December 31, 2024, and 2023:
2. Summary of significant accounting policies and nature of operations (continued)
Revenue and expenses
The Company recognizes revenue under the guidance of ASC 606 "Contracts with Customers". The Company's revenue is principally generated through franchise agreements executed with the Company's franchisees. Each franchise agreement is comprised of several performance obligations.
The Company identifies those performance obligations, determines the contract price for each performance obligation, allocates the transaction price to each performance obligation and recognizes revenue when the Company has satisfied the performance obligation by transferring control of the good or service to the franchisee.
In accordance with Topic 606, we account for the following pre-opening services as distinct from the franchise license:
- Assistance in the selection of a site.
- Assistance in obtaining facilities and preparing the facilities for their intended use, including related financing, architectural, and engineering services, and lease negotiation.
- Training of the franchisee's personnel or the franchisee.
- Preparation and distribution of manuals and similar material concerning operations, administration, and record-keeping.
- Bookkeeping, information technology, and advisory services, including setting up the franchisee's records and advising the franchisee about income, real estate, and their taxes or about regulations affecting the franchisee's business; and
- Inspection, testing, and other quality control programs.
Advertising costs
The Company expenses advertising costs as incurred. Advertising expense for the years ended December 31, 2023 and 2022 were $10,612.86 and $0, respectively.
4. Related-party transactions
During the year ended December 31, 2024, and 2023, the Company paid rent expenses of $6,500 and $3,000 to its affiliate for the usage of common workspace. No amount is outstanding for the year ending December 31, 2024, and 2023.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 47)
What This Means (2025 FDD)
According to Beauty Bungalows' 2025 Franchise Disclosure Document, the company was formed in July 2021 as a Wyoming limited liability company. Beauty Bungalows Franchising LLC was created with the purpose of franchising beauty stores throughout the United States. The company has a single member who possesses 100% ownership.
Beauty Bungalows recognizes revenue primarily through franchise agreements with its franchisees. The company follows specific steps to recognize revenue, including identifying performance obligations, determining contract prices, allocating transaction prices, and recognizing revenue when obligations are met by transferring control of goods or services to the franchisee. These performance obligations can include assistance in site selection, help with facilities and financing, personnel training, providing operational manuals, and offering bookkeeping and IT services.
For the years ending December 31, 2024, and 2023, total member contributions were $16,618 and $37,988, respectively, while total member distributions were $0 and $60,000, respectively. Beauty Bungalows expenses advertising costs as they are incurred. Advertising expenses for the years ending December 31, 2023 and 2022, amounted to $10,612.86 and $0, respectively. The company also paid rent expenses of $6,500 and $3,000 to its affiliate for the usage of common workspace during the years ended December 31, 2024, and 2023.