What was the total deferred revenue (current and non-current) for Face Foundrie in 2022?
Face_Foundrie Franchise · 2025 FDDAnswer from 2025 FDD Document
r 31, 2023, and 2022 were $30,000 and $34,000, respectively and for all years reported are classified as current. There were no deferred contract costs as of December 31, 2024.
The Company has estimated the following current and non-current portions of deferred revenue as of December 31, 2024,
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 total deferred revenue, which includes both current and non-current portions, was $1,768,804 as of December 31, 2022. This figure represents the sum of $131,147 in current deferred revenue and $1,637,657 in non-current deferred revenue.
Deferred revenue typically arises from initial franchise fees, continuing royalties, advertising fees, and technology fees that Face Foundrie collects but has not yet earned. The current portion represents revenue expected to be recognized within the next year, while the non-current portion is for periods beyond one year. This revenue recognition policy allocates the initial franchise fee to the pre-opening services obligation, which is recognized when the pre-opening services are fulfilled, generally when the franchisee begins operations.
For a prospective Face Foundrie franchisee, this deferred revenue figure indicates the financial obligations that Face Foundrie has to its franchisees for services yet to be rendered. It reflects the company's commitment to providing ongoing support and services in exchange for the fees it collects. Understanding the breakdown between current and non-current deferred revenue can provide insights into the timing of revenue recognition and the company's future service obligations.
It is important for potential franchisees to consider deferred revenue as part of their due diligence, as it represents a liability for Face Foundrie. While deferred revenue is a common accounting practice in franchising, franchisees should ensure that the franchisor has a clear plan and the resources to fulfill its obligations related to these deferred amounts.