What were the contract costs recognized by Kitchen Solvers in 2022?
Kitchen_Solvers Franchise · 2025 FDDAnswer from 2025 FDD Document
t Auditor's Report
Note 4 Contract Assets and Liabilities (Continued)
The following table provides information about significant changes in contract liabilities and assets for the years ended December 31:
| 2024 | 2023 | 2022 | ||||
|---|---|---|---|---|---|---|
| Contract liabilities - Net of contract assets, | ||||||
| beginning | $ 582,519 | $ | 518,363 | $ | 437,293 | |
| Initial franchise fee revenue recognized | (259,581) | (232,748) | (193,048) | |||
| Contract costs recognized | 138,404 | 120,154 | 105,366 | |||
| New contract costs paid | (200,000) | (228,250) | (292,000) | |||
| Collections of initial franchise fees | 488,991 |
Source: Item 21 — Financial Statements (FDD pages 48–49)
What This Means (2025 FDD)
According to Kitchen Solvers' 2025 Franchise Disclosure Document, the contract costs recognized in 2022 were $105,366. This figure represents the expenses that Kitchen Solvers recognized as revenue related to franchise contracts during that year.
For a prospective franchisee, understanding contract costs is crucial as it reflects the financial management and revenue recognition practices of Kitchen Solvers. The contract costs recognized are part of the overall financial health of the company, which can impact the support and resources available to franchisees. Monitoring these costs over time can provide insights into the stability and growth potential of the franchise system.
It is important for potential franchisees to review these figures in the context of Kitchen Solvers' overall financial statements, including revenues, expenses, and liabilities, to gain a comprehensive understanding of the company's financial performance. This information can help in assessing the risks and opportunities associated with investing in a Kitchen Solvers franchise.