What was the total deferred revenue for Hck Hot Chicken as of December 31, 2023?
Hck_Hot_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
ferred revenue
The following table presents changes in the Company's deferred revenues for the years ended December 31, 2023 and 2022:
| 2023 | 2022 | |||||
|---|---|---|---|---|---|---|
| Deferred franchise fees: | ||||||
| Balance at January 1 | $ | 78,667 | $ | 10.0 | ||
| Payments due on contracts | 80,000 | 80,000 | ||||
| Revenue recognized during the period | ( | 10,334 | ) | ( | 1,333 | ) |
| Balance at December 31 | $ | 148,333 2023 | $ | 78,667 2022 | ||
| Deferred area rep fees: | 777 | |||||
| Balance at January 1 | S | 168,000 | S | G#1 | ||
| Payments due on contracts | 444,900 | 238,000 | ||||
| Revenue recognized during the period | ( | 81,660 | ) | ( _ | 70,000 | ) |
| Balance at December 31 | $ | 531,240 | $ | 168,000 | ||
| Total deferred revenue | $ | 679,573 | $ | 246,667 | ||
| - | 2023 | _ | 2022 |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 54)
What This Means (2025 FDD)
According to Hck Hot Chicken's 2025 Franchise Disclosure Document, the total deferred revenue as of December 31, 2023, was $679,573. This deferred revenue is comprised of deferred franchise fees and deferred area representative fees. These are revenues that Hck Hot Chicken has collected but not yet recognized as earned.
The deferred franchise fees had a balance of $148,333 at the end of 2023. This amount represents the portion of initial franchise fees that Hck Hot Chicken hadn't yet recognized as revenue. The deferred area rep fees had a balance of $531,240 at the end of 2023. This represents payments from area developers that Hck Hot Chicken will recognize as revenue as the developers open new locations.
The FDD also breaks down the total deferred revenue into current and long-term liabilities. As of December 31, 2023, $89,660 was classified as current, meaning it was expected to be recognized within the next year, and $589,913 was classified as long-term, meaning it was expected to be recognized beyond the next year. This breakdown gives a potential franchisee insight into when Hck Hot Chicken expects to recognize these revenues.