What were the current deferred contract costs for Kidokinetics in the financial statements?
Kidokinetics Franchise · 2024 FDDAnswer from 2024 FDD Document
23, 2022, and 2021
| 2023 | 2022 | 2021 | ||||
|---|---|---|---|---|---|---|
| Assets | ||||||
| Current assets | ||||||
| Cash and cash equivalents | $ | 76,964 | $ | 32,500 | $ | 40,556 |
| Accounts receivable | 446,951 | 498 | - | |||
| Deferred contract costs, current | 340,727 | 326,228 | - | |||
| Total current assets | 864,642 | 3 |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 59)
What This Means (2024 FDD)
According to Kidokinetics's 2024 Franchise Disclosure Document, the company provided estimates for current deferred contract costs as of December 31, 2023, 2022, and 2021. These costs are associated with franchise agreements, where Kidokinetics defers related contract costs like broker commissions and training expenses over the contract's life. These costs are then recorded as deferred contract costs.
As of December 31, 2023, the current deferred contract costs were $340,727. For the year ending December 31, 2022, these costs amounted to $326,228. The company did not have any deferred contract costs to report for the year ending December 31, 2021.
Prospective franchisees should understand that deferred contract costs represent expenses Kidokinetics has incurred but will recognize over time. These costs are related to setting up new franchises and supporting their initial operations. The fluctuation in these costs from year to year can reflect the pace of franchise expansion and the investments Kidokinetics is making in franchisee support.
Reviewing these figures helps potential franchisees understand Kidokinetics's financial management and how it accounts for the costs associated with expanding its franchise network. It is important to note that these are deferred costs, meaning they will impact Kidokinetics's profitability over several years, not just in the year they were incurred.