What was the beginning balance of deferred expenses for Deer Solution in the earlier period presented in the table?
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 beginning balance of deferred expenses for the earlier period presented in the table was $407,143. The table provides a breakdown of deferred expenses, showing how the beginning balance is affected by additional deferred expenses, expenses recognized, and current maturities to arrive at the deferred expenses net of current maturities.
Deferred expenses typically represent costs that have been paid but not yet recognized as expenses on the income statement. In the context of a franchise, these often relate to initial franchise fees that are recognized over the term of the franchise agreement. The table shows how these deferred expenses are amortized (recognized as expenses) over time.
For a prospective Deer Solution franchisee, understanding the deferred expenses is crucial for assessing the company's financial health and how franchise fees are accounted for. It's important to note how the initial franchise fee is treated and over what period it is recognized, as this can impact the franchisee's initial investment and ongoing profitability.