What were the non-current deferred contract costs for Kidokinetics in the financial statements?
Kidokinetics Franchise · 2024 FDDAnswer from 2024 FDD Document
ed contract costs.
The Company has estimated the following current and non-current portions of deferred contract costs as of December 31, 2023, 2022, and 2021:
| Deferred contract costs, current | $ | 340,727 | $ | 326,228 | $ | - |
|---|---|---|---|---|---|---|
| Deferred contract costs, non-current | 1,173,255 | 282,706 | - | |||
| $ | 1.513.982 |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 59)
What This Means (2024 FDD)
According to Kidokinetics's 2024 Franchise Disclosure Document, the company defers related contract costs such as broker commissions and training costs over the life of the franchise agreement and records them as deferred contract costs. The non-current portion of these deferred contract costs represents the amount not expected to be recognized within the next year.
As of December 31, 2023, the non-current deferred contract costs for Kidokinetics were $1,173,255. In the prior year, as of December 31, 2022, these costs were $282,706. For the year ending December 31, 2021, the non-current deferred contract costs were not specified.
These figures provide insight into how Kidokinetics manages and amortizes its initial costs associated with setting up new franchise locations. A significant increase in non-current deferred contract costs from 2022 to 2023 could indicate substantial growth in franchise agreements, increased broker commissions, or higher training costs. Prospective franchisees should consider these trends and inquire about the specific factors driving these changes to better understand the financial health and growth trajectory of Kidokinetics.