What was the total amount of Cinnaholic's contract liability, net of current, on December 31, 2022?
Cinnaholic Franchise · 2025 FDDAnswer from 2025 FDD Document
those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit.
Muhammad Zubairy, CPA PC
Westbury, NY
April 4, 2024
CINNAHOLIC FRANCHISING LLC BALANCE SHEETS
| DECE | MBER 31 | |
|---|---|---|
| 2023 | 2022 | |
| ASSETS | ||
| Current Assets | ||
| Cash | $ 42,590 | $ 264,588 |
| Securities held for sale | - | 88,212 |
| Accounts Receivable | 188,000 | 282,821 |
| Prepaid asset | 536,157 | 434,231 |
| Due from franchisee | 1,500 | 1,500 |
| Contract assets | 145,664 | 132,139 |
| Total Current Assets | 913,911 | 1,203,491 |
| Contract assets-net of current | 826,565 | 843,747 |
| Total Assets | $ 1,740,476 | $ 2,047,238 |
| LIABILITIES AND MEMBER: | S' (DEFICIT) | |
| Current Liabilities | ||
| Accounts payable and accrued expenses | $ 117,649 | $ 129,897 |
| Related party payable | 377,838 | 316,838 |
| SBA loan payable | - | 3,266 |
| Advertising fund liability | - | 10,218 |
| Contract liability | 64 |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 61)
What This Means (2025 FDD)
According to Cinnaholic's 2025 Franchise Disclosure Document, the company's contract liability, net of current, was $2,453,611 as of December 31, 2022. This figure represents the portion of non-refundable franchise fees that Cinnaholic has received but not yet earned as of that date, minus any amounts classified as current liabilities (i.e., those expected to be settled within one year). These deferred revenues are recognized over the life of the franchise agreement.
For a prospective Cinnaholic franchisee, this information indicates the extent of the franchisor's financial obligations related to franchise fees already collected. It reflects Cinnaholic's commitment to provide ongoing services and support to its franchisees over the term of their agreements. The contract liability, net of current, represents the long-term portion of this obligation.
It is important to note that this figure only reflects the liability associated with non-refundable franchise fees. It does not include other potential liabilities or obligations that Cinnaholic may have to its franchisees. Franchisees should consider this information in conjunction with other financial data and disclosures in the FDD to assess the overall financial health and stability of the Cinnaholic franchise system.