What was the amount of Best Brains' deferred franchise revenue - Current as of December 31, 2023?
Best_Brains Franchise · 2025 FDDAnswer from 2025 FDD Document
| December 31, 2024 | December 31, 2023 | |
|---|---|---|
| Current Liabilities | ||
| Account and credit card payable | 4,116,083 | 3,545,720 |
| Mortgages, notes, bonds payable within 1 year | 157,834 | 50,129 |
| Deferred franchise revenue - Current | 111,920 | 45,025 |
| Other current liabilities | 157,392 | 170,701 |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 42)
What This Means (2025 FDD)
According to Best Brains' 2025 Franchise Disclosure Document, the deferred franchise revenue - Current was $45,025 as of December 31, 2023. This figure represents the portion of franchise fees that Best Brains has received but not yet recognized as earned revenue.
Deferred revenue typically arises when Best Brains collects initial franchise fees upfront but recognizes the revenue over the term of the franchise agreement. This accounting practice aligns with the principle of recognizing revenue when the service is actually provided to the franchisee. In Best Brains' case, the initial franchise fees are amortized over a period of 5 years from the start of the franchisee location.
For a prospective Best Brains franchisee, this deferred revenue balance indicates the financial obligations Best Brains has to its franchisees for services yet to be rendered. It also reflects the company's accounting practices regarding revenue recognition, which is a standard procedure in the franchise industry. Reviewing these figures can provide insight into the financial stability and accounting practices of Best Brains.