What was the change in deferred revenues on franchise sales for Bumble Roofing in 2023, as restated?
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 |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 53)
What This Means (2025 FDD)
According to Bumble Roofing's 2025 Franchise Disclosure Document, the deferred revenues on franchise sales experienced a decrease of $824,331 in 2023, as restated. This figure is part of the broader "Changes in assets and liabilities" section within the cash flow statement.
Deferred revenue on franchise sales represents the initial fees collected from franchisees for services that Bumble Roofing has yet to complete. These services typically include providing advertising materials, training, website development, and on-site assistance. The decrease in deferred revenue suggests that Bumble Roofing completed a significant portion of these initial services for new franchisees during 2023, thereby recognizing the revenue associated with those services.
For a prospective Bumble Roofing franchisee, this information provides insight into the company's revenue recognition practices and its ability to deliver initial services to new franchisees. A decrease in deferred revenue could be a positive sign, indicating efficient onboarding and support for new franchisees. However, it's important to consider this figure in conjunction with other financial metrics to gain a comprehensive understanding of the company's financial health and operational efficiency. A potential franchisee should inquire about the specific services included in the initial franchise fee and the timeline for their completion to better understand the deferred revenue dynamics.