What was the total amount of Face Foundrie's gift card liability in 2023?
Face_Foundrie Franchise · 2025 FDDAnswer from 2025 FDD Document
| 2024 | 2023 | 2022 | |
|---|---|---|---|
| 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 |
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 is obligated to honor. The gift card liability is a current liability, meaning it is expected to be settled within one year.
For a prospective Face Foundrie franchisee, the gift card liability indicates the financial obligation the company has to its customers for outstanding gift cards. This liability is important because Face Foundrie must have sufficient cash or liquid assets to cover these obligations as customers redeem their gift cards. The FDD also notes that $1,458,965 was set aside in cash and cash equivalents for the satisfaction of the gift card liability as of December 31, 2023.
Understanding the gift card liability is crucial for assessing the financial health and stability of Face Foundrie. A high gift card liability could indicate strong sales and customer loyalty, but it also requires careful management to ensure that the company can meet its obligations when gift cards are redeemed. Franchisees should monitor this figure and understand how Face Foundrie manages its gift card program to ensure smooth operations and customer satisfaction.