What were the advertising costs for Dog Haus for the year ended December 31, 2022?
Dog_Haus Franchise · 2025 FDDAnswer from 2025 FDD Document
provides a practical expedient to Accounting Standards Codification (ASC) 606, Revenue from Contracts with Customers, that permits franchisors that are not public entities to account for preopening services provided to a franchisee as distinct from the franchise license if the services are consistent with those included in a predefined list within ASU 2021-02. Additionally, ASU 2021-02 provides an accounting policy election to recognize pre-opening services as a single performance obligation, which the Company has elected.
Notes to Financial Statements December 31, 2024, 2023 and 2022
Franchise Fees, Royalty Revenue and Development Fees: Franchise fees are nonrefundable and are generally due upon signing of t
Source: Item 23 — RECEIPTS (FDD pages 87–328)
What This Means (2025 FDD)
According to Dog Haus's 2025 Franchise Disclosure Document, franchisees are required to pay 2% of net sales as marketing, creative, and technology fees. Dog Haus states that these payments are to be used for specific advertising purposes, including the promotion of Dog Haus restaurants. The marketing fees are reported at gross on the statements of operations, with the related marketing costs showing as an expense.
For the year ended December 31, 2022, Dog Haus's marketing fee income was $1,375,340. This figure represents the total amount collected from franchisees for marketing purposes during that year. It's important to note that this is the income received, not necessarily the exact amount spent on advertising during that specific period.
As of December 31, 2024, Dog Haus had cumulatively spent $1,129,326 in marketing expenses in excess of the fees collected. This indicates that Dog Haus may, at times, spend more on marketing than it collects in fees, potentially drawing from other revenue sources to support advertising and promotional activities. A prospective franchisee should inquire about the breakdown of these marketing expenses to understand how the funds are allocated across different advertising channels and initiatives.