What was the total amount of Cicis' deferred initial beverage fund in 2024?
Cicis Franchise · 2025 FDDAnswer from 2025 FDD Document
and certain internal control-related matters that we identified during the audit.
Dallas, Texas April 25, 2025
Combined Balance Sheets December 31, 2024 and 2023
| 2024 | 2023 | |
|---|---|---|
| Assets | ||
| Current assets: | ||
| Cash and cash equivalents | $ 1,854,735 | $ 2,931,372 |
| Cash and cash equivalents—marketing fund, restricted | 434,199 | 771,794 |
| Accounts receivable, net: | ||
| Trade receivables | 290,921 | 325,874 |
| Marketing fund, restricted | 2,395,119 | 2,537,488 |
| Related party receivable | 695,717 | 79,530 |
| Prepaid expenses and other current assets | 859,866 | 228,561 |
| Total current assets | 6,530,557 | 6,874,619 |
| Other receivables | 12,638 | 58,761 |
| Website, net | 150,333 | 194,333 |
| Intangible assets, net | 98,719 | 109,488 |
| Goodwill, net | 14,678 | 17,058 |
| Total noncurrent assets | 276,368 | 379,640 |
| Total assets | $ 6,806,925 | $ 7,254,259 |
| Liabilities and Members' Capital | ||
| Current liabilities: | ||
| Accounts payable | $ - | $ 413,045 |
| Accounts payable—marketing fund, restricted | 275,741 | 206,861 |
| Current portion of deferred franchise fees | 85,717 | 73,092 |
| Accrued expenses and other current liabilities | 1,262,223 | 1,377,451 |
| Related party payable | - | 596,796 |
| Marketing fund liabilities, restricted | 1,513,594 | 1,937,309 |
| Total current liabilities | 3,137,275 | 4,604,554 |
| Deferred franchise fees, less current portion | 627,681 | 540,862 |
| Deferred initial beverage fund | 618,745 | 1,006,131 |
| Total liabilities | 4,383,701 | 6,15 |
Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 58–64)
What This Means (2025 FDD)
According to Cicis's 2025 Franchise Disclosure Document, the total deferred initial beverage fund was $618,745 in 2024. This figure represents the amount of revenue that Cicis has received but not yet recognized as earned income. This deferred revenue is associated with incentive payments from vendors related to beverage purchases within the Cicis system.
For a prospective franchisee, this deferred revenue indicates that Cicis has existing financial arrangements with beverage vendors that provide upfront payments. These payments are then recognized as income over time as franchisees and company-owned restaurants purchase the vendors' products. The deferred initial beverage fund is a liability on Cicis' balance sheet, reflecting the company's obligation to provide future benefits (in this case, access to beverage supply arrangements) in exchange for the upfront payments.
The FDD also provides information on the current portion of deferred revenue, which was approximately $539,683 in 2024. This current portion, combined with the long-term portion, gives a more complete picture of the total deferred revenue related to beverage funds. Understanding these deferred revenue streams can help a franchisee assess the financial stability and vendor relationships of Cicis.
Reviewing the trend of these deferred amounts over the past few years, as presented in the FDD, can further inform a franchisee about the consistency and potential future value of these vendor arrangements. It's also worth noting that the company recognized approximately $680,000 of revenue in 2024 related to these vendor incentive payments, which is recorded as incentive income from vendors on the combined statements of income.