What is the reported deferred franchise revenue - current for Best Brains?
Best_Brains Franchise · 2025 FDDAnswer from 2025 FDD Document
tances, but not for the purpose of expressing an opinion on the effectiveness of Best Brains Inc's internal control. Accordingly, no such opinion is expressed.
- Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.
- Conclude whether, in our judgment, there are conditions or events considered in the aggregate that raise substantial doubt about Best Brains Inc's ability to continue as a going concern for a reasonable period of time
We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control–related matters that we identified during the audit.
Accutax Bizsolutions LLC Certified Public Accountant
Kalispell, Montana
Date: May 7, 2025
BALANCE SHEET December 31, 2024, and 2023
ASSETS
| December 31, 2024 | December 31, 2023 | |
|---|---|---|
| Current Assets | ||
| Cash and cash equivalents | $ 219,342 | $ 285,979 |
| Due from related affiliates | 100,000 | 199,679 |
| Accounts Receivable | 2,444,879 | 2,038,407 |
| Advances | 140,891 | 140,891 |
| Inventory | 1,483,909 | 417,347 |
| Loan receivable | 666,477 | 942,746 |
| Other |
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 is reported in the balance sheets for the fiscal years ending December 31, 2024, and December 31, 2023. The balance sheet shows that as of December 31, 2024, Best Brains had $111,920 in deferred franchise revenue - current. As of December 31, 2023, Best Brains had $45,025 in deferred franchise revenue - current.
Deferred franchise revenue represents franchise fees that Best Brains has received upfront but has not yet recognized as earned revenue. This is because Best Brains recognizes the revenue over a period of time, typically the life of the franchise agreement. The "current" portion of deferred revenue represents the amount that Best Brains expects to recognize as revenue within the next year.
For a prospective Best Brains franchisee, this information indicates the amount of franchise fees that Best Brains has collected but not yet earned. It also shows how this amount has changed year-over-year, which can provide insights into the company's financial performance and revenue recognition practices. A significant increase in deferred revenue could suggest strong franchise sales growth, while a decrease might indicate slower sales or changes in the revenue recognition policy.