What was the total amount of City Wide's deferred franchise revenue (current) in 2022?
City_Wide Franchise · 2025 FDDAnswer from 2025 FDD Document
| 2024 | 2023 | 2022 | ||||
|---|---|---|---|---|---|---|
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||
| Current Liabilities | ||||||
| Accounts payable | $ 16,356,455 | $ 13,026,131 | $ 9,791,091 | |||
| Accrued expenses | 1,533,826 | 889,963 | 776,610 | |||
| Current portion of operating lease liabilities | 188,516 | 182,963 | 180,007 | |||
| Deferred franchise revenue, current | 740,924 | 692,473 | 605,215 | |||
| Other deferred income | 715,920 | 358,640 | 225,115 | |||
| Total current liabilities | 19,535,641 | 15,150,170 | 11,578,038 |
Source: Item 23 — RECEIPT (FDD pages 65–271)
What This Means (2025 FDD)
According to City Wide's 2025 Franchise Disclosure Document, the company's total deferred franchise revenue (current) for the year 2022 was $605,215. This figure represents the portion of franchise fees that City Wide has received but not yet recognized as earned revenue on its financial statements.
Deferred revenue typically arises when City Wide receives initial franchise fees upfront but has not yet provided all of the services or benefits for which those fees are intended. As City Wide fulfills its obligations to franchisees over time, such as providing training, support, or access to its brand and systems, the corresponding portion of the deferred revenue is recognized as earned revenue.
For a prospective City Wide franchisee, the deferred revenue figures provide insight into the financial health and revenue recognition practices of the franchisor. It demonstrates that City Wide is not immediately recognizing all franchise fee income but rather spreading it out over the service period, which is a common and generally accepted accounting practice in the franchise industry.