What were the prepaid incremental franchise costs for Expense Reduction Analysts in 2024?
Expense_Reduction_Analysts Franchise · 2025 FDDAnswer from 2025 FDD Document
g of the audit, significant audit findings, and certain internal control related matters that we identified during the audit.
CliftonLarsonAllen LLP
Clifton Larson Allen LLP
Milwaukee, Wisconsin
April 9, 2025
| 2024 | 2023 | |||
|---|---|---|---|---|
| ASSETS | ||||
| CURRENT ASSETS | ||||
| Cash and Cash Equivalents | $ | 2,213,765 | $ | 1,251,718 |
| Accounts Receivable, Net | , | 371,963 | 444,102 | |
| Prepaid Expenses | 82,365 | 85,996 | ||
| Prepaid Incremental Franchise Costs | 475,881 | 393,234 | ||
| Prepaid Taxes | 192,835 | 235,161 | ||
| Due from Related Parties | 1,031,474 | 1,005,148 | ||
| Total Current Assets | 4,368,283 | 3,415,359 | ||
| PROPERTY AND EQUIPMENT, Net | 30,278 | 18,770 | ||
| INTERNAL-USE SOFTWARE, Net | 157,857 | 129,805 | ||
| OTHER ACCETS | ||||
| OTHER ASSETS Prepaid Incremental Franchise Costs, Noncurrent Portion | 3,034,623 | 2,464,230 | ||
| Operating Right-of-Use Asset, Net | 164,045 | 2,404,230 | ||
| Deposits |
Source: Item 23 — RECEIPTS (FDD pages 58–215)
What This Means (2025 FDD)
According to Expense Reduction Analysts' 2025 Franchise Disclosure Document, the prepaid incremental franchise costs for 2024 are detailed in the balance sheets. These costs are separated into current and noncurrent portions. The current portion, representing costs expected to be utilized within one year, was $475,881 in 2024. The noncurrent portion, covering costs beyond one year, amounted to $3,034,623 in 2024.
These prepaid costs likely include expenses related to the initial franchise fee and other startup costs that Expense Reduction Analysts amortizes over the life of the franchise agreement. The separation into current and noncurrent portions reflects standard accounting practices, providing a clearer picture of Expense Reduction Analysts' financial obligations and asset utilization over different time horizons.
For a prospective Expense Reduction Analysts franchisee, understanding these figures is crucial. It highlights the scale of initial investments the franchisor makes to support new franchisees. Additionally, it's important to note that these prepaid costs are assets on Expense Reduction Analysts' balance sheet, meaning they represent future economic benefits for the company. A potential franchisee should inquire about the specific items included in these prepaid costs and the amortization schedule to fully grasp their financial implications.