What was the gift card liability for Face Foundrie in 2024?
Face_Foundrie Franchise · 2025 FDDAnswer from 2025 FDD Document
Restrictions on Use
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 lease liability, non-current | 284,843 | 343,795 | 376,281 |
| Deferred revenue, non-current | 1,72 |
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, 2024, was $2,434,596. This figure represents the total value of unredeemed gift cards that Face Foundrie is obligated to honor. The FDD also notes that 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.
For a prospective franchisee, the gift card liability is an important consideration. It reflects a future obligation that Face Foundrie has to its customers. While the franchisee benefits from the initial sale of the gift card, they also share in the responsibility of ensuring that the services are provided when the gift card is redeemed. This liability is managed by Face Foundrie, which reimburses the location when the gift cards are redeemed, ensuring that the franchisee is not unduly burdened by this obligation.
It's also worth noting the trend in Face Foundrie's gift card liability over the past few years. The gift card liability has increased from $712,736 in 2022 to $1,468,430 in 2023, and then to $2,434,596 in 2024. This increase could indicate growing brand popularity and gift card sales, but also a larger outstanding obligation. A prospective franchisee should consider these trends and how they might impact their location's operations and cash flow.
Additionally, Face Foundrie sets aside cash and cash equivalents for the satisfaction of the gift card liability. As of December 31, 2024, $2,326,400 was set aside for this purpose. This indicates a proactive approach to managing this liability and ensures that funds are available to cover redemptions. This practice can provide reassurance to franchisees that the company is financially prepared to meet its obligations related to outstanding gift cards.