What items comprised Face Foundrie's other current assets as of December 31, 2023 and 2022?
Face_Foundrie Franchise · 2025 FDDAnswer from 2025 FDD Document
2023, the balance was $750,000, which the Company converted into a note receivable. The terms of the note call for quarterly payments over five years beginning March 1, 2024. The note accrues interest at a rate of 1.99% annually. As of December 31, 2024, the balance was $750,000.
(i) Other Current Assets
The Company has other current assets of $29,383 and $73,451 as of December 31, 2023 and 2022, respectively. There were not any other current assets as of December 31, 2024. These items consist of accrued royalty, advertising, and technology fee reve
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 other current assets consisted of accrued royalty, advertising, and technology fee revenue, as well as gift card revenue. As of December 31, 2023, Face Foundrie had $29,383 in other current assets, while on December 31, 2022, the company had $73,451 in other current assets. There were no other current assets as of December 31, 2024.
For a prospective franchisee, understanding the composition and valuation of these assets is important. Accrued revenues represent income that Face Foundrie has earned but not yet received in cash. These mainly come from royalties, advertising, and technology fees that franchisees owe to the company. Gift card revenue represents the value of outstanding gift cards that have been sold but not yet redeemed.
The FDD states that Face Foundrie regularly assesses the carrying amounts of other current assets to ensure they are not overstated and are recoverable in the normal course of business. This indicates that Face Foundrie management actively monitors these assets and makes adjustments if they believe the recorded values are not accurate. Any impairments or adjustments to the carrying amounts are recognized in the period in which they are identified, which could impact the company's financial performance in a given period.
Prospective franchisees may want to inquire about the specific methodologies Face Foundrie uses to estimate accrued revenues and the likelihood of gift card redemption. Understanding these accounting practices can provide insight into the quality and reliability of Face Foundrie's reported financial results.