What was the total amount of Kidokinetics' deferred revenue (current) as of December 31, 2023?
Kidokinetics Franchise · 2024 FDDAnswer from 2024 FDD Document
| Deferred contract costs, current | $ | 340,727 | $ | 326,228 | $ | - |
|---|---|---|---|---|---|---|
| Deferred contract costs, non-current | 1,173,255 | 282,706 | - | |||
| $ | 1.513.982 | $ | 608,934 | $ |
NOTES TO THE FINANCIAL STATEMENTS December 31, 2023, 2022, and 2021
The Company has estimated the following current and non-current portions of deferred revenue as of December 31, 2023, 2022, and 2021:
| Deferred revenue, current | $ | 506,073 | $ |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 59)
What This Means (2024 FDD)
According to Kidokinetics' 2024 Franchise Disclosure Document, the company's current deferred revenue as of December 31, 2023, was $506,073. Deferred revenue represents payments Kidokinetics has received for services or products that have not yet been fully provided or delivered. In the case of Kidokinetics, this primarily relates to initial franchise fees that are allocated to pre-opening services and amortized over the life of the franchise agreement.
For a prospective Kidokinetics franchisee, this figure indicates the amount of revenue that Kidokinetics has already collected but has not yet recognized as earned income on its financial statements. This deferred revenue is typically associated with the initial franchise fees paid by new franchisees. The revenue will be recognized over the term of the franchise agreement, which is typically ten years.
The deferred revenue balance can be influenced by the number of new franchises Kidokinetics has sold recently. A higher balance of deferred revenue may suggest that Kidokinetics is actively expanding and adding new franchisees to its system. It is important to note that while deferred revenue represents future income for Kidokinetics, it also signifies an obligation to provide ongoing support and services to its franchisees.
Understanding the deferred revenue balance can provide insights into the financial health and growth trajectory of Kidokinetics. Prospective franchisees should consider this information in conjunction with other financial metrics and disclosures in the FDD to assess the overall financial stability and performance of the franchise system.