What was the balance of deferred non-refundable franchise fees for City Publications at the end of 2023?
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 end of 2023 was $56,679. This figure represents the amount of franchise fees that City Publications had collected but not yet recognized as revenue as of December 31, 2023. These fees are typically deferred and recognized over a period of time as the franchisor provides services or fulfills obligations to the franchisee. The beginning balance of deferred non-refundable franchise fees for 2023 was $48,752.
During 2023, City Publications deferred an additional $30,300 in non-refundable franchise fees. However, the company also recognized $22,373 of non-refundable franchise fees during the same year. The recognition of these fees reduces the deferred balance as City Publications fulfills its obligations related to those fees.
For a prospective franchisee, understanding the deferred revenue balance is important because it reflects the franchisor's financial stability and how it accounts for franchise fee revenue. A significant deferred revenue balance can indicate that City Publications is steadily growing and collecting franchise fees, which are then recognized over time as services are provided to franchisees. This accounting practice is standard in the franchise industry, as it aligns revenue recognition with the delivery of services and support to franchisees.