What was the amount of deferred revenues on franchise sales for Bumble Roofing in 2023?
Bumble_Roofing Franchise · 2025 FDDAnswer from 2025 FDD Document
IDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDING SEPTEMBER 30, 2024, 2023, AND 2022
| 2024 | 2023 ("As Restated") | 2022 ("As Restated") | |
|---|---|---|---|
| Cash Flows from Operating Activities: | |||
| Net income | $ 20,459,018 | $ 9,920,680 | $ 6,089,513 |
| Adjustments to reconcile net income | |||
| to net cash provided by operating activities: | |||
| Bad debt expense | 300,531 | 59,046 | 82,201 |
| Depreciation and amortization | 10,773,355 | 7,910,727 | 5,494,567 |
| Lease expense | 940,945 | 519,344 | - |
| Operating lease payments | (657,754) | (265,181) | - |
| Changes in assets and liabilities: | (0.000.10=) | (=00.000) | (0.044.045) |
| Royalties and accounts receivable | (2,099,495) | (729,389) | (2,044,615) |
| Rebates receivable | (73,676) | (1,815,484) | (47.454) |
| Notes receivable | (403,653) | 113,076 | (17,454) |
| Inventory Prepaid expenses and other assets | (246,248) | (1,043,705) | (122,300) |
| 1,348,125 | 192,280 | (976,687) | |
| Accounts payable and accrued expenses | 153,274 | 2,121,617 | 925,000 |
| Deferred revenues on franchise sales | (1,253,452) , , , , | (824,331) | 1,337,600 |
| Customer deposits | (502,153) | 706,594 | (306,386) |
| Net Cash Provided by Operating Activities | 28,738,817 | 16,865,274 | 10,461,439 |
| Cash Flows from Investing Activities: | |||
| Purchases of property and equipment | (1,054,507) | (1,494,918) | (467,351) |
| Internally developed software additions | (715,046) | (318,010) | (267,000) |
| Net cash received from acquisition of Koala and Wallaby | - | 33,145 | - |
| Net cash received from acquisition of Canopy | - | 641 | - |
| Cash paid for Bumble Bee of LA | (421,250) | - | - |
| Acquisition of Junk Junk Baby | (125,000) | - | |
| Net advances from (repayments to) affiliated companies | 743,827 | 2,966,646 | (3,790,229) |
| Net Cash Provided (Required) by Investing Activities | (1,446,976) | 1,062,504 | (4,524,580) |
| Cash Flows from Financing Activities: | |||
| Net distributions to Member | (26,088,010) | (17,682,672) | (5,078,245) |
| Net Cash Required by Financing Activities | (26,088,010) | (17,682,672) | (5,078,245) |
| Net Change in Cash | 1,203,831 | 245,106 | 858,614 |
| Cash, Beginning of Year | 1,737,401 |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 53)
What This Means (2025 FDD)
According to Bumble Roofing's 2025 Franchise Disclosure Document, the contract liability for deferred revenue on franchise sales in 2023 was approximately $824,331. This figure represents the initial services that Bumble Roofing had not yet completed for franchisees as of the end of 2023. These services are part of the franchise agreement, and the revenue is recognized once Bumble Roofing completes these initial obligations.
Deferred revenue is a common accounting practice in franchising. It reflects the franchisor's obligation to provide services before recognizing the associated revenue. For a prospective Bumble Roofing franchisee, this indicates that a portion of the initial franchise fee covers these startup services, such as training, advertising materials, and website development.
The decrease in deferred revenues on franchise sales from 2022 ($1,337,600) to 2023 ($824,331) could indicate that Bumble Roofing completed more initial services for new franchisees in 2023 compared to 2022, thus recognizing more of the deferred revenue. This metric provides insight into the timing of revenue recognition and the fulfillment of obligations to franchisees.