What was the total amount of Best Brains' franchise fees advance as of December 31, 2022?
Best_Brains Franchise · 2025 FDDAnswer from 2025 FDD Document
sing communications costs the first time the advertising takes place. Advertising expense was $ 302,366.80. for the year ended December 31, 2023.
NOTE 5 - REVENUE RECOGNITION
In May 2014, the FASB issued Accounting Standards Update 2014-09, Revenue from Contracts w
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 liability was $162,151.40 as of December 31, 2022. This figure represents the amount of franchise fees Best Brains had received in advance but had not yet recognized as earned revenue.
In practical terms, this means that Best Brains collected $162,151.40 in franchise fees for which they still had a future obligation to provide services or fulfill other requirements of the franchise agreement as of the end of 2022. This deferred revenue is recognized over the life of the franchise agreement, which is generally five years.
For a prospective franchisee, this indicates that Best Brains receives franchise fees upfront and amortizes them over the term of the agreement. It's a common accounting practice in franchising to defer revenue until the franchisor has fulfilled its obligations, providing a more accurate picture of the company's financial performance in each period.