How does Best Brains account for advertising production costs?
Best_Brains Franchise · 2025 FDDAnswer from 2025 FDD Document
,849.78 | | Total | 2,038,407.38 |
Property / Equipment and Software Development costs
Property and equipment are recorded at cost. Depreciation is provided on a straight-line/Declining balance basis over the estimated us
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 42)
What This Means (2025 FDD)
According to Best Brains' 2025 Franchise Disclosure Document, the company expenses advertising production costs as they are incurred. Additionally, Best Brains expenses advertising communication costs the first time the advertising takes place.
For a prospective franchisee, this means that Best Brains does not defer or amortize advertising production costs over a period of time. Instead, these costs are fully recognized as expenses in the period they are incurred. This accounting method can impact the reported profitability of Best Brains in any given period, as significant advertising expenses will reduce net income during that time.
The FDD states that Best Brains' advertising expense was $302,366.80 for the year ended December 31, 2023. This figure gives potential franchisees an idea of the level of investment Best Brains makes in advertising and promotion. Understanding how these costs are accounted for helps franchisees assess the financial health and marketing strategies of the company.