What was the amount of Face Foundrie's gift card liability as of December 31, 2023?
Face_Foundrie Franchise · 2025 FDDAnswer from 2025 FDD Document
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The use of this report is restricted to inclusion within the Company's Franchise Disclosure Document (FDD) and is not intended to be, and should not be, used or relied upon by anyone for any other use.
St. George, Utah April 16, 2025
BALANCE SHEETS
As of December 31, 2024, 2023 and 2022
| 2024 | 2023 | 2022 | |
|---|---|---|---|
| Assets | |||
| Current assets | |||
| Cash and cash equivalents | $ 3,480,620 | $ 1,969,123 | $ 1,611,868 |
| Accounts receivable, net | 424,770 | 96,311 | 101,020 |
| Prepaid expenses | 8,530 | 17,976 | - |
| Related party note receivable | 750,000 | 750,000 | 130,986 |
| Deferred contract costs | - | 30,000 | 34,000 |
| Other current assets | - | 29,383 | 73,451 |
| Total current assets | 4,663,920 | 2,892,793 | 1,951,325 |
| Non-current assets | |||
| Operating lease right-of-use asset | 331,322 | 366,840 | 400,209 |
| Equipment, net | 8,039 | 5,030 | 6,577 |
| Intangible assets, net | 41,404 | 53,872 | 42,340 |
| Total non-current assets | 380,765 | 425,742 | 449,126 |
| Total assets | $ 5,044,685 | $ 3,318,535 | $ 2,400,451 |
| Liabilities and Member's Deficit | |||
| Current liabilities | |||
| Accounts payable | $ 42,622 | $ 20,074 | $ - |
| Accrued expenses | 39,488 | 31,279 | 63,084 |
| Credit card payable | 19,368 | 22,075 | 9,497 |
| Gift card liability | 2,434,596 | 1,468,430 | 712,736 |
| Operating lease liability, current | 58,952 | 32,486 | 29,204 |
| Deferred revenue, current | 819,881 | 447,000 | 131,147 |
| Total current liabilities | 3,414,907 | 2,021,344 | 945,668 |
| Non-current liabilities | |||
| Operating leas |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 73)
What This Means (2025 FDD)
According to Face Foundrie's 2025 Franchise Disclosure Document, the company's gift card liability as of December 31, 2023, was $1,468,430. This figure represents the total value of unredeemed gift cards that Face Foundrie was obligated to honor at that point in time. The gift card liability is a current liability, meaning it is expected to be settled within one year.
For a prospective Face Foundrie franchisee, understanding the gift card liability is important for assessing the company's overall financial health and stability. A high gift card liability could indicate strong sales and customer loyalty, but it also represents a future obligation that the company must be prepared to meet. Face Foundrie processes gift card purchases for all locations and recognizes a gift card liability in the amount of the unredeemed gift cards as of year-end. The company then reimburses each location when the gift cards are redeemed.
It's also worth noting the trend in Face Foundrie's gift card liability over the three years presented in the balance sheet. The gift card liability increased from $712,736 in 2022 to $1,468,430 in 2023, and further to $2,434,596 in 2024. This growth suggests an increasing reliance on gift cards as a source of revenue or a growing popularity of gift cards among Face Foundrie customers. Franchisees should inquire about Face Foundrie's strategy for managing its gift card program and ensuring that sufficient funds are available to cover future redemptions.