What were the new contract costs paid 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's 2025 Franchise Disclosure Document, the new contract costs paid in 2022 were $(292,000). This figure reflects the actual cash outflow Kitchen Solvers made during that year related to securing new franchise contracts.
For a prospective franchisee, this number provides insight into Kitchen Solvers's investment in growth and expansion. It represents the expenses they incurred to bring new franchisees into the system. These costs can include marketing, advertising, and legal fees associated with the franchise sales process.
It's important to note that this is a cash flow figure, meaning it reflects the actual money spent during the year. It differs from 'contract costs recognized,' which is an accounting term that reflects the expense recognized on the income statement, regardless of when the cash was actually paid. Reviewing these figures over several years can reveal trends in Kitchen Solvers's growth strategy and efficiency in acquiring new franchisees.