What was the amount of additional deferred revenue for Deck Medic in 2022?
Deck_Medic Franchise · 2024 FDDAnswer from 2024 FDD Document
the franchise contract liability balances during the years ended December 31, 2022 and 2021, respectively. Franchise contract liability is included in deferred revenue on the accompanying balance sheets.
| 2022 | 2021 | |
|---|---|---|
| Beginning balance | $20,250 | $- |
| Additional deferred revenue | 2 | 37,500 |
| Revenue recognized – ad |
Source: Item 23 — RECEIPTS (FDD pages 43–228)
What This Means (2024 FDD)
According to Deck Medic's 2024 Franchise Disclosure Document, the additional deferred revenue for 2022 was $2. This figure represents the increase in deferred revenue during that year, which is revenue that Deck Medic has received but not yet earned. This often relates to services or products that will be delivered in the future.
Deferred revenue is a common accounting practice, especially in franchise systems where initial franchise fees or other payments may cover services or rights extending over a period of time. The recognition of this revenue is spread out over the service period, rather than being recognized immediately upon receipt of payment.
For a prospective Deck Medic franchisee, understanding deferred revenue is important because it reflects the financial health and accounting practices of the franchisor. It shows how much revenue is tied to future obligations and can provide insights into the sustainability of the franchisor's revenue streams. Reviewing these figures over several years can reveal trends in how Deck Medic manages its finances and obligations.