What was the amount of expenses recognized related to additional deferred expenses for Deer Solution?
Deer_Solution Franchise · 2025 FDDAnswer from 2025 FDD Document
Total Revenue | $ | 394,229 | $ | 119,276 |
Contract Balances
The following table provides information about the change in the franchise deferred expenses balances during the years ended December 31:
| Beginning balance | $ | 339,286 | $ | 407,143 |
|---|---|---|---|---|
| Additional deferred expenses | .= | _ | ||
| Expenses recognized – additional deferred expens |
Source: Item 23 — RECEIPTS (FDD pages 55–246)
What This Means (2025 FDD)
According to Deer Solution's 2025 Franchise Disclosure Document, the expenses recognized related to additional deferred expenses were $67,857. This figure appears in a table outlining deferred expenses. The table also shows the beginning balance of deferred expenses, additional deferred expenses, the resulting deferred expenses, current maturities, and deferred expenses net of current maturities.
Specifically, the table provides a snapshot of these deferred expenses both for the current period and the prior period. This level of detail is useful for prospective franchisees as it provides insight into how Deer Solution accounts for and recognizes revenue over time. Understanding these accounting practices can help franchisees better interpret the company's financial statements and assess its financial health.
Deferred revenue typically arises from the initial franchise fees that Deer Solution collects. These fees are not immediately recognized as revenue but are instead amortized over the life of the franchise agreement. This accounting treatment is standard in the franchise industry, as it aligns revenue recognition with the period during which the franchisor provides ongoing services and support to the franchisee. The deferred expenses are then recognized as the services are provided.