What was the amount of deferred franchise revenue-current for Best Brains as of December 31, 2023?
Best_Brains Franchise · 2025 FDDAnswer from 2025 FDD Document
| Particulars | Schedule No. | As at December 31, 2023 | As at December 31, 2022 |
|---|---|---|---|
| ASSETS | |||
| Current Assets Cash & cash equivalents | 1 | 262,049.67 | 154,275.10 |
| Inventory | _ | 417,347.00 | 289,840.00 |
| Trade Receivables | 2 | 2,038,407.38 | 1,549,975.79 |
| Other Current Assets Total Currrent Assets | 3 | 255,726.78 2,973,530.83 | 225,576.84 2,219,667.73 |
| Property and Equipment ,net of accumulated depreciation | 4 | 290,790.28 | 268,207.05 |
| Other Assets | 5 | 1,076,049.46 | 958,557.46 |
| Total Assets | 4,340,370.57 | 3,446,432.24 | |
| Current liabilities Accounts Payable Other Current Liabilities Deferred Franchise revenue-current Total Current Liabilities | 6 | 3,444,214.53 276,415.25 45,025.00 3,765,654.78 | 2,654,584.46 80,489.91 65,939.00 2,801,013.37 |
| Long term liabilities | 7 | ||
| Loans & Advances | • | 144,439.99 | 140,568.45 |
| Mortgages ,notes , bonds payable in 1 year or m | iore | 150,000.00 | 150,000.00 |
| Deferred Franchise revenue-long term Total Long Term Liabilities | 91,143.01 385,583.00 | 96,212.40 386,780.85 | |
| Total Liabilities | 4,151,237.78 | 3,187,794.22 | |
| Shareholder's Equity | |||
| Common Stock | 1,000.00 | 1,000.00 | |
| Additional Paid in capital | 8 | 121,375.00 66,757.79 | 121,375.00 136,263.02 |
| Retained Earnings- Unappropriated | |||
| Total Equity | 189,132.79 | 258,638.02 | |
| Total Liabilities and Shareholder's Equity | 4,340,370.57 | 3,446,432.24 |
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 as of December 31, 2023, was $45,025. 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 a period of time, usually the term of the franchise agreement. This accounting practice aligns revenue recognition with the delivery of services and support to the franchisee. For Best Brains, 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 amount of future service obligations Best Brains has to its current franchisees. It reflects a financial commitment from Best Brains to provide ongoing support and fulfill its contractual obligations. A higher deferred revenue balance could suggest a stronger base of ongoing franchisee support.
The FDD also lists the deferred franchise revenue - Non-current as $91,143 as of December 31, 2023. This represents the portion of deferred revenue that will be recognized beyond the next 12 months. The current and non-current portions together represent the total deferred revenue related to franchise fees received in advance.