How much in non-refundable franchise fees did City Publications recognize in 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 company recognized $22,373 in non-refundable franchise fees during the year 2023. This figure reflects the amount of deferred franchise fees that City Publications recognized as revenue during that specific year. These fees are initially deferred, meaning they are not immediately recognized as income when received. Instead, they are recognized over a period of time as City Publications fulfills its obligations to the franchisee.
For a prospective City Publications franchisee, this information provides insight into the financial accounting practices of the franchisor. It demonstrates how City Publications accounts for franchise fees, which can be helpful in understanding the company's overall financial health and stability. The recognition of non-refundable franchise fees is a standard accounting practice in the franchise industry, as it aligns revenue recognition with the delivery of services and support to franchisees.
It's important to note that the initial franchise fee paid by a new franchisee is non-refundable. The deferred revenue accounting method spreads the recognition of this upfront fee over a period of time. This accounting practice does not impact the franchisee directly, but it does provide transparency into the franchisor's revenue streams and financial performance. Understanding these accounting practices can help a franchisee assess the long-term viability of the City Publications franchise system.