What was the total amount of Best Brains' non-current liabilities as of December 31, 2024?
Best_Brains Franchise · 2025 FDDAnswer from 2025 FDD Document
| December 31, 2024 | December 31, 2023 | |
|---|---|---|
| Non-Current Liabilities | ||
| Mortgages, notes, bonds payable in 1 year or more | 300,090 | 94,311 |
| Economic injury disaster loan (EIDL) | 150,000 | 150,000 |
| Deferred franchise revenue - Non-current | 402,161 | 91,143 |
| Total Non-current Liabilities | 852,251 | 335,454 |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 42)
What This Means (2025 FDD)
According to Best Brains' 2025 Franchise Disclosure Document, the total non-current liabilities as of December 31, 2024, amounted to $852,251. This figure comprises several components, including mortgages, notes, and bonds payable in one year or more, which totaled $300,090. Additionally, an Economic Injury Disaster Loan (EIDL) contributed $150,000 to the non-current liabilities. Deferred franchise revenue, categorized as non-current, accounted for $402,161.
Non-current liabilities represent Best Brains' long-term financial obligations that are not expected to be settled within the next 12 months. For a prospective franchisee, understanding the composition and magnitude of these liabilities provides insight into the company's long-term financial health and stability. A high level of non-current liabilities could indicate significant long-term debt or deferred obligations, which might impact the franchisor's ability to support its franchisees or invest in future growth.
The presence of a substantial EIDL, obtained in 2020, suggests that Best Brains, like many businesses, was affected by the economic challenges posed by the COVID-19 pandemic. The deferred franchise revenue component reflects payments received for franchise rights that have not yet been fully earned, which is a common practice in franchising. The increase in deferred franchise revenue from $91,143 in 2023 to $402,161 in 2024 could indicate growth in franchise sales.
Franchisees should consider these liabilities in the context of Best Brains' overall financial position, including its assets and revenue streams. Comparing these figures to previous years, as presented in the financial statements, can reveal trends and provide a more comprehensive understanding of the franchisor's financial management and long-term solvency. It is advisable for potential franchisees to discuss these liabilities with Best Brains and seek professional financial advice to assess the potential implications for their investment.