Does Kitchen Solvers expense advertising costs as incurred?
Kitchen_Solvers Franchise · 2025 FDDAnswer from 2025 FDD Document
e balance sheet.
Notes to Financial Statements
See Independent Auditor's Report
Note 1 Summary of Significant Accounting Policies (Continued)
Advertising Costs
The Company uses advertising to promote its activities as a franchiser of retail outlets in cabinetry. In addition, advertising is used in retail lead generation programs for franchisees participating in the Company's national advertising programs. Accordingly, adver
Source: Item 21 — Financial Statements (FDD pages 48–49)
What This Means (2025 FDD)
According to Kitchen Solvers' 2025 Franchise Disclosure Document, the company expenses advertising costs as they are incurred. This accounting practice applies both to Kitchen Solvers' own advertising efforts as a franchisor and to retail lead generation programs for franchisees participating in national advertising programs.
For a prospective Kitchen Solvers franchisee, this means that the advertising expenses reflected in the company's financial statements represent the actual costs incurred during those periods. This provides a clearer picture of the company's profitability and financial health, as advertising expenses are not deferred or amortized over a longer period. This accounting method is generally considered conservative.
The FDD also specifies the advertising costs charged to expense for the years ended December 31, 2024, 2023, and 2022, which were $39,480, $37,809, and $59,264, respectively. These figures give potential franchisees an idea of Kitchen Solvers' historical spending on advertising. Note that these figures reflect Kitchen Solvers' expenses, not the advertising obligations or options for franchisees themselves.
It is important for prospective franchisees to understand how advertising expenses are handled, as this can impact the perceived financial performance of the company. Expensing advertising costs as incurred provides a transparent view of these expenses, allowing franchisees to assess the company's commitment to marketing and lead generation.