What was the balance of deferred non-refundable franchise fees for City Publications at the beginning of 2024?
City_Publications Franchise · 2025 FDDAnswer from 2025 FDD Document
l recently issued Accounting Standards Updates ("ASU"). The adoption of the recently issued ASUs, including those not yet effective, is not anticipated to have a material effect on the financial position or results of operations of the Company.
NOTE 2 – CONTRACTS WITH CUSTOMERS
The Company has recorded a liability for unearned revenue associated with the performance obligation of the Company's franchise agreements. The account bala
Source: Item 23 — RECEIPT (FDD pages 39–129)
What This Means (2025 FDD)
According to City Publications' 2025 Franchise Disclosure Document, the balance of deferred non-refundable franchise fees at the beginning of 2024 was $56,679. This represents the amount of franchise fees that City Publications had collected but not yet recognized as revenue as of the start of that year. These fees are typically deferred and recognized over a period of time as City Publications provides services or fulfills its obligations to the franchisees.
Deferred revenue is a common accounting practice in franchising, especially with non-refundable franchise fees. The initial franchise fee often covers various services and support provided to the franchisee during the initial setup phase. Therefore, it is recognized as revenue over the period that these services are delivered.
For a prospective City Publications franchisee, this deferred revenue balance indicates the financial health and accounting practices of the franchisor. It reflects how City Publications recognizes revenue from franchise fees over time. Understanding this deferred revenue can provide insights into the franchisor's revenue recognition policies and financial stability.