What was the amount of deferred revenue for Clean Your Dirty Face in 2023?

According to Clean Your Dirty Face's 2025 Franchise Disclosure Document, the deferred revenue as of December 31, 2023, was $850,000. This deferred revenue entirely consisted of ten Clean Your Dirty Face Franchise agreements covering seventeen locations that were yet to open as of that date.

Deferred revenue typically represents payments Clean Your Dirty Face has received for services or products that have not yet been delivered or rendered. In this case, it's franchise fees received for locations that were not yet open. This is a common accounting practice in franchising, where initial franchise fees are often recognized as revenue over time as the franchisor provides ongoing support and services to the franchisee.

For a prospective Clean Your Dirty Face franchisee, this deferred revenue figure indicates the franchisor's financial obligations to new franchisees who have paid their initial fees but are still in the process of opening their locations. It also reflects the number of franchise agreements signed but not yet operational, which can be an indicator of future growth for the Clean Your Dirty Face system. Reviewing the trend in deferred revenue over multiple years can provide insights into the pace of franchise expansion and the franchisor's ability to convert signed agreements into operating locations.