What was the increase (decrease) in deferred revenue for Cr3 American Exteriors in 2023?
Cr3_American_Exteriors Franchise · 2025 FDDAnswer from 2025 FDD Document
Loss | (46,591) | | Equity at December 31, 2022 | $ 4,820 | | Equity at January 1, 2023 | $ 4,820 | | Capital Contributions | 28,589 | | Net Loss | (14,538) | | Equity at December 31, 2023 | $ 18,871 | | Equity at January 1, 2024 | $ 18,871 | | Capital Contributions | 30,000 | | Net Loss | 89,667 | | Equity at December 31, 2024 | $ 138,538 |
Statements of Cash Flows For The Three Years Ended December 31, 2024
| 2024 | 2023 | 2022 | |
|---|---|---|---|
| Cash Flows From Operating Activities: | · | ||
| Net Income (Loss) | $ 89,667 | $ (14,538) | $ (46,591) |
| Adjustments to Reconcile Net Loss to Net | |||
| Cash Provided by Operating Activities: | |||
| Depreciation & Amortization | 87 | 87 | 29 |
| Changes in Assets and Liabi |
Source: Item 23 — RECEIPTS (FDD pages 53–150)
What This Means (2025 FDD)
According to Cr3 American Exteriors' 2025 Franchise Disclosure Document, the increase in deferred revenue in 2023 was $32,375. This figure represents the change in the amount of revenue that Cr3 American Exteriors has collected but not yet earned as of the end of 2023. Deferred revenue typically arises from initial franchise fees that are recognized over time.
For a prospective Cr3 American Exteriors franchisee, this deferred revenue figure provides insight into how the company recognizes revenue from its franchise fees. The increase suggests that Cr3 American Exteriors collected more in franchise fees than it recognized as earned revenue during that year. This is a common practice in franchising, as initial franchise fees are often amortized over the term of the franchise agreement.
It's important to note that deferred revenue is a liability on the company's balance sheet, as it represents an obligation to provide future services or benefits to franchisees. The Notes to the Financial Statements, as stated in Note 5, Management has determined that revenue from the initial franchise fee should be recognized equally over a ten-year period monthly beginning when the contract is signed. At December 31, 2023, the amounts in deferred revenue consist of the current portion that will be recognized during the subsequent calendar year, and the long-term portion that will be recognized as previously stated.