What total amount of franchisee deposits has Crave Cookies deferred?
Crave_Cookies Franchise · 2025 FDDAnswer from 2025 FDD Document
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Notes to the Financial Statements
Note 2 - Revenue from Contracts with Franchisees (continued)
During the year ended December 31, 2024, the Company recognized franchising fees of $710,776. Franchisee deposits in amount of $1,277,049 have been deferred until the revenue recognition requirements of generally accepted accounting principles have been met.
Revenues from continuing fees, including royalties, marketing fees and upfront franchise fees.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 47)
What This Means (2025 FDD)
According to Crave Cookies' 2025 Franchise Disclosure Document, as of December 31, 2024, the company has deferred franchisee deposits totaling $1,277,049. These deposits are classified as contract liabilities (also known as deferred revenue) on the company's balance sheet.
Crave Cookies defers the recognition of these deposits as revenue until they have met the requirements of generally accepted accounting principles. Specifically, the deposits are recognized as income when the franchise location opens. This accounting practice ensures that Crave Cookies recognizes revenue when it has fulfilled its obligations to the franchisee, such as providing pre-opening training and other services.
For a prospective Crave Cookies franchisee, this deferred revenue figure indicates the amount of money the company is holding in deposits for future franchise openings. It reflects Crave Cookies's commitment to fulfilling its obligations before recognizing the revenue, which is a standard and prudent accounting practice in the franchise industry.