What was the change in deferred revenue for Brain Balance in 2024?
Brain_Balance Franchise · 2025 FDDAnswer from 2025 FDD Document
| Years Ended December 31, 2024, 2023, and 2022 | ||||
|---|---|---|---|---|
| 2024 | 2023 | 2022 | ||
| Cash Flows from Operating Activities | ||||
| Net (loss) income | $(324,837) $ | 161,876 $ | 307,374 | |
| Adjustments to reconcile net (loss) income to net cash and | ||||
| restricted cash from operating activities: | ||||
| Depreciation and amortization | 49,819 | 29,920 | 24,806 | |
| Credit loss expense | 59,741 | 5,560 | - | |
| Changes in operating assets and liabilities that (used) | ||||
| provided cash and restricted cash: | ||||
| Accounts receivable | (126,097) | 42,623 | (75,804) | |
| Deferred franchise costs | 20,050 | 23,393 | 19,952 | |
| Prepaid expenses and other assets | (33,382) | (10,615) | 53,332 | |
| Accounts payable and accrued expenses | (66,584) | (46,246) | 81,063 | |
| Deferred revenue | 16,809 | (89,332) | (96,172) | |
| Accrued advertising expenses | (56,130) | (98,824) | 84,461 | |
| Net cash and restricted cash (used in) provided | ||||
| by operating activities | (460,611) | 18,355 | 399,012 |
Source: Item 23 — RECEIPTS (FDD pages 72–292)
What This Means (2025 FDD)
According to Brain Balance's 2025 Franchise Disclosure Document, the deferred revenue increased by $16,809 in 2024. This figure is part of the cash flow from operating activities reported in the financial statements. Deferred revenue represents payments Brain Balance has received for services or products that have not yet been delivered or recognized as earned revenue.
For a prospective franchisee, an increase in deferred revenue could indicate growing sales and customer commitments. It means Brain Balance is collecting more money upfront for future services. This could be a positive sign of brand strength and market demand. However, it's important to understand the specific reasons behind the change.
Franchisees should inquire about the nature of the deferred revenue. Is it primarily related to initial franchise fees, ongoing services, or other sources? Understanding the composition of deferred revenue can provide insights into the sustainability and predictability of Brain Balance's revenue streams. It also highlights the importance of Brain Balance fulfilling its future obligations to realize this revenue.