What was the deferred franchise revenue (current) for Best Brains 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 |
| Total Liabilities | 4,543,229 | 3,811,576 |
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 is a common accounting practice in franchising. Best Brains collects initial franchise fees upfront from new franchisees. However, because Best Brains has not yet fully performed its obligations to the franchisee at the time of payment, the revenue recognition is deferred.
The deferred revenue is recognized over time as Best Brains fulfills its obligations under the franchise agreement. In Best Brains' case, the franchise fees are amortized over a period of five years from the start of the franchisee's location. This means that each month, a portion of the deferred revenue is recognized as earned revenue on Best Brains' income statement. For a prospective franchisee, this indicates the amount of revenue Best Brains has already collected for services it will provide in the future.