What was the total amount of non-current liabilities for Chocolate Bash as of December 31, 2023?
Chocolate_Bash Franchise · 2024 FDDAnswer from 2024 FDD Document
| ASSETS | 12/31/23 12/31/22 12/31/21 | ||
|---|---|---|---|
| CURRENT ASSETS | |||
| Cash and Cash Equivalents | $ 21,639 | $ 59,295 | $ 104,922 |
| Accounts Receivable | 2,153 | 21,194 | - |
| TOTAL CURRENT ASSETS | 23,792 | 80,489 | 104,922 |
| NON-CURRENT ASSETS | |||
| Due To/From Related Party | 35,956 | - | - |
| TOTAL NON-CURRENT ASSETS | 35,956 | - | - |
| TOTAL ASSETS | 59,748 | 80,489 | 104,922 |
| LIABILITIES AND OWNER'S EQUITY | |||
| CURRENT LIABILITIES | |||
| Deferred Revenue, current portion | 7,146 | 3,500 | 24,750 |
| TOTAL CURRENT LIABILITIES | 7,146 | 3,500 | 24,750 |
| NON-CURRENT LIABILITIES | |||
| Deferred Revenue | 51,729 | 30,479 | 32,250 |
| TOTAL NON-CURRENT LIABILITIES | 51,729 | 30,479 | 32,250 |
| TOTAL LIABILITIES | 58,875 | 33,979 | 57,000 |
| OWNER'S EQUITY |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 38)
What This Means (2024 FDD)
According to Chocolate Bash's 2024 Franchise Disclosure Document, the total non-current liabilities as of December 31, 2023, were $51,729. This figure represents obligations that Chocolate Bash has that are not expected to be settled within the next 12 months. For a prospective franchisee, understanding the nature of these non-current liabilities is crucial.
The primary component of Chocolate Bash's non-current liabilities is deferred revenue. Deferred revenue represents payments Chocolate Bash has received for goods or services that have not yet been fully earned. In this case, the deferred revenue is $51,729 as of December 31, 2023. This usually relates to franchise fees received for which the services, such as training and support, are still being provided over time.
It's important for potential franchisees to understand how deferred revenue impacts Chocolate Bash's financial health. While it represents money in hand, it also signifies a future obligation to provide services. A high deferred revenue balance can indicate strong future revenue streams, but also increased responsibility to fulfill those obligations. Reviewing the trend of deferred revenue over the three years presented (2021-2023) can provide insight into the stability and growth of Chocolate Bash's franchise operations.
Prospective franchisees should consider this information in conjunction with other financial metrics to assess the overall financial stability and operational efficiency of Chocolate Bash. Understanding the composition and changes in non-current liabilities, particularly deferred revenue, can aid in evaluating the long-term financial commitments and obligations of the franchisor.