What was the total amount of Contract Liabilities for Crisp & Green as of December 31, 2023?
Crisp_Green Franchise · 2024 FDDAnswer from 2024 FDD Document
| December 31, | December 31, | December 31, | January 1, | |
|---|---|---|---|---|
| 2023 | 2022 | 2021 | 2021 | |
| Contract Assets: | $ | $ | $ | $ |
| Accounts Receivable | 519,829 | 2,164,457 | 744,194 | 85,375 |
| Contract Liabilities: | ||||
| Deferred Franchise Fees | 7,412,300 | 8,175,200 | 4,496,300 | 983,400 |
Source: Item 23 — RECEIPTS (FDD pages 66–252)
What This Means (2024 FDD)
According to Crisp & Green's 2024 Franchise Disclosure Document, the company's contract liabilities, specifically deferred franchise fees, totaled $7,412,300 as of December 31, 2023. This figure represents the amount of revenue that Crisp & Green has received but not yet earned, typically related to initial franchise fees. The document also provides comparative figures for previous years, showing deferred franchise fees of $8,175,200 as of December 31, 2022, $4,496,300 as of December 31, 2021, and $983,400 as of January 1, 2021.
For a prospective Crisp & Green franchisee, this information is useful for understanding the company's financial health and revenue recognition practices. A high level of deferred franchise fees may indicate strong franchise sales, but it also means that Crisp & Green has an obligation to fulfill its contractual obligations to these franchisees before recognizing that revenue. The trend in deferred franchise fees over the years can provide insights into the company's growth trajectory and sales performance.
It's important to note that deferred revenue is a common accounting practice in franchising, where initial franchise fees are often recognized over the term of the franchise agreement. Reviewing these figures in conjunction with other financial statements, such as the balance sheets and statements of operations, can provide a more comprehensive understanding of Crisp & Green's financial position and performance. Additionally, comparing these figures to industry benchmarks can help a potential franchisee assess the company's financial stability and growth potential relative to its peers.