What was the amount of deferred franchise fees for Cicis in 2024?
Cicis Franchise · 2025 FDDAnswer from 2025 FDD Document
| 2024 | 2023 | |||
|---|---|---|---|---|
| Current liabilities: | ||||
| Accounts payable | $ 413,045 | $ 107,404 | ||
| Accounts payable—marketing fund, restricted | 23,972 | |||
| Current portion of deferred franchise fees | 73,092 | 42,792 | ||
| Accrued expenses and other current liabilities | 1,377,451 | 2,131,831 | ||
| Related party payable | 596,796 | 169,529 | ||
| Marketing fund liabilities, restricted | 1,937,309 | 530,265 | ||
| Total current liabilities | 4,604,554 | 3,005,793 | ||
| Deferred franchise fees, less current portion | 337,871 | |||
| Other noncurrent liabilities | 1,006,131 | 1,795,214 |
Source: Item 23 — RECEIPTS (FDD pages 65–263)
What This Means (2025 FDD)
According to Cicis's 2025 Franchise Disclosure Document, the current portion of deferred franchise fees was $73,092 in 2024. The deferred franchise fees, less the current portion, was $337,871 in 2024. This means that Cicis recognizes franchise fee revenue over a period of time, rather than all upfront. The current portion represents the amount of revenue expected to be recognized within the next year, while the remaining deferred portion will be recognized in subsequent years.
For a prospective franchisee, this indicates that Cicis is not immediately recognizing all of the franchise fees as revenue. Instead, they are spreading the recognition over a period. This accounting practice can provide a more accurate picture of the company's financial performance over time.
It is important to note that these figures represent the deferred franchise fees for the entire Cicis system, not just for a single franchise location. A franchisee should focus on their own specific franchise agreement to understand how their fees will be accounted for and when Cicis will recognize that revenue.
Understanding these accounting practices can help a potential franchisee assess the financial stability and revenue recognition methods of Cicis. It's a common practice in franchising to defer revenue, but the specific terms and amounts can vary, so it's crucial to review the FDD carefully.