What was the amount of additional deferred revenue for Deer Solution?
Deer_Solution Franchise · 2025 FDDAnswer from 2025 FDD Document
in the franchise contract liability balances during the years ended December 31, 2024 and 2023, respectively. Franchise contract liability is included in deferred revenue on the accompanying balance sheets.
| Beginning balance | $ | 250,714 | $ | 300,857 | |
|---|---|---|---|---|---|
| Additional deferred revenue | 124,500 | - | |||
| Revenue recognized – additional deferred revenue | (68,572 |
Source: Item 23 — RECEIPTS (FDD pages 55–246)
What This Means (2025 FDD)
According to Deer Solution's 2025 Franchise Disclosure Document, the additional deferred revenue for the period is detailed in the notes to the financial statements. The table provided shows a breakdown of deferred revenue activity. In the provided table, Deer Solution had $124,500 in additional deferred revenue. This figure represents an increase in the amount of franchise fees collected that are deferred over the life of the franchise agreement.
Deferred revenue is recognized over the term of the franchise agreement, which in this case is seven years. The revenue recognized from additional deferred revenue during the same period was ($68,572). This amount represents the portion of the previously deferred revenue that Deer Solution recognized as earned revenue during that period.
Understanding deferred revenue is crucial for prospective franchisees as it reflects how Deer Solution accounts for initial franchise fees. The additional deferred revenue indicates new franchise agreements signed, while the revenue recognized shows how the company is amortizing those fees over time. This accounting practice affects the company's reported revenue and profitability in any given year.