What were the current maturities of deferred direct franchising costs for Deka Lash on 12/31/2021?
Deka_Lash Franchise · 2024 FDDAnswer from 2024 FDD Document
s used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.
- Conclude whether, in our judgement, there are conditions or events, considered in the aggregate, that raise substantial doubt about DL Franchising, LLC's ability to continue as a going concern for a reasonable period of time.
We are required to communicate with those charged with governance regarding, amount other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control related matters that we identified during the audit.
The Mumford Group Bountiful, Utah
February 24, 2024
| 1 | 2/31/2023 | . 1 | 2/31/2022 | 7 1 | 12/31/2021 | |
|---|---|---|---|---|---|---|
| ASSETS | ||||||
| CURRENT ASSETS | ||||||
| Cash and cash equivalents Accounts receivable, net of allowance for doubtful | $ | 402,347 | S | 415,665 | 5 | 507,842 |
| accounts of $28,000, $6,718 and $6,718, respectively | 250,199 | 716,829 | 420,834 | |||
| Prepaid expenses | 139,044 | 186,830 | 293,204 | |||
| Inventory | 662,468 | 751,095 | 884,592 | |||
| Accrued interest - notes receivable | 1.618 | |||||
| Notes receivable - related parties | 514,485 | 99,990 | 14,470 | |||
| Current portion of notes receivable | 13,414 | 29,950 | ||||
| Current maturities of deferred direct franchising costs | _ | 569,298 | _ | 564,211 | _ | 510,978 |
| TOTAL CURRENT ASSETS | 2,551,255 | 2,766,188 | Ξ | 2,631,920 | ||
| PROPERTY AND EQUIPMENT, at cost | 140,284 | 200,047 | 103,776 | |||
| Less: accumulated depreciation | _ | (119,092) | _ | (101,144) | _ | (87,705 |
| TOTAL PROPERTY AND EQUIPMENT | _ | 21,192 | 98,903 | _ | 16,071 | |
| OTHER ASSETS | ||||||
| Intangible assets, net | 34,891 | 50,141 | 51,672 | |||
| Notes receivable, net of current portion | 17,500 | 74,100 | ||||
| Deferred direct franchising costs, net of current | 2,593,893 | 3,072,873 | 3,048,017 | |||
| Deposits | _ | _ | 11,010 | _ | 3,719 | |
| TOTAL OTHER ASSETS | _ | 2,646,284 | 3,208,124 | _ | 3,103,408 | |
| TOTAL ASSETS | $ | 5,218,731 | $ | 6,073,215 | $ | 5,751,399 |
| LIABILITIES AND MEMB | ER'S | CAPITAL | ||||
| CURRENT LIABILITIES | ||||||
| Accounts payable | 5 | 372,771 | 5 | 143,996 | 5 | 118,334 |
| Accrued liabilities | 425,702 | 491,506 | 405,831 | |||
| Current maturities of deferred franchise fees | 1,159,901 | 1,183,930 | 1,08 |
Source: Item 23 — RECEIPT (FDD pages 63–234)
What This Means (2024 FDD)
According to Deka Lash's 2024 Franchise Disclosure Document, the current maturities of deferred direct franchising costs as of December 31, 2021, were $510,978. This figure represents the portion of deferred direct franchising costs that Deka Lash expects to recognize as expenses within the next year.
For a prospective franchisee, this indicates the level of investment Deka Lash has made in acquiring and supporting new franchisees, and how much of those costs are expected to be realized in the short term. Deferred costs typically include expenses related to franchise sales and initial setup support provided to franchisees.
It is important to note that these are costs incurred by the franchisor, Deka Lash, and not direct costs to the franchisee. However, the management of these costs can reflect the financial strategy and health of the franchisor, which indirectly affects franchisees. Reviewing these figures over several years, as presented in the table, can provide insights into Deka Lash's growth and investment patterns.