What was the balance of Bft's contract liabilities at December 31, 2023?
Bft Franchise · 2025 FDDAnswer from 2025 FDD Document
r effect on the Company's operations and financial results, and, as such, it was not presented as discontinued operations.
Note 4 – Contract Liabilities and Costs from Contracts with Customers
Contract liabilities – Contract liabilities consist of deferred revenue resulting from franchise fees and development fees paid by franchisees, which are recognized over time on a straight-line basis over the franchise agreement term. Also included in the deferred revenue balance are non-refundable prepayments for training revenue. The Company classifies these contract liabilities as either current deferred revenue or non-current deferred revenue in the
Notes to Consolidated Financial Statements (amounts in thousands)
cons
Source: Item 23 — RECEIPTS (FDD pages 79–265)
What This Means (2025 FDD)
According to Bft's 2025 Franchise Disclosure Document, the balance of contract liabilities at December 31, 2023, was $121,238. This figure represents the total amount of deferred revenue Bft had on its books at the end of 2023, stemming from contracts with members. Deferred revenue typically arises when Bft receives payments for services or products that will be delivered in the future.
This deferred revenue is recognized as liabilities because Bft has an obligation to provide services or products in the future. The initial contract liabilities contributed by members was $96,875. The balance increased by $24,363 during the period, excluding amounts recognized as revenue.
For a prospective franchisee, this information provides insight into Bft's financial health and revenue recognition practices. A significant deferred revenue balance could indicate strong future revenue streams, but it also highlights the company's obligation to fulfill its contractual commitments. Franchisees may want to inquire about the specific terms and conditions associated with these contract liabilities to understand the underlying obligations and potential impact on Bft's financial performance.