What was the total deferred revenue for Ledgers at December 31, 2022?
Ledgers Franchise · 2025 FDDAnswer from 2025 FDD Document
doubt about Loyalty Business Services, LLC's ability to continue as a going concern for a reasonable period of time.
We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control related matters that we identified during the audit.
Bernard Robinson & Company, I.S.P.
Raleigh, North Carolina April 28, 2025
${\bf LOYALTY; BUSINESS; SERVICES,; LLC; (FORMERLY; FIDE; HOLDING,; LLC)}$
Balance Sheets
December 31, 2024, 2023 and 2022
| 2 | Assets | ||||||
|---|---|---|---|---|---|---|---|
| 2024 | 2023 | 2022 | |||||
| Current Assets: | S | ||||||
| Cash and cash equivalents | $ 424,085 | $ 181,077 | $ 264,411 | ||||
| Royalty receivables | 3,190 | 3,302 | - | ||||
| Notes receivable, current | 40,760 | 229,901 | |||||
| Total Current Assets | 427,275 | 225,139 | 494,312 | ||||
| Non-Current Assets: | |||||||
| Notes receivable, less current portion | = | 634,000 | |||||
| Due from related parties | 630,180 | 1,229,516 | 1,320,815 | ||||
| Deferred tax asset | 715,000 | 611,000 | 513,000 | ||||
| Total Non-Current Assets | 1,345,180 | 1,840,516 | 2,467,815 | ||||
| Total Assets | $ 1,772,455 | $ 2,065,655 | $ 2,962,127 | ||||
| Liabilities and Members' Equity | |||||||
| Current Liabilities: | |||||||
| Accounts payable | $ 15,010 | $ 15,010 | $ 125,974 | ||||
| Accrued expenses | 4,755 | 9,975 | 5,152 | ||||
| Due to related parties | 852,180 | 737,180 | 305,000 | ||||
| Deferred revenue - current | 24,000 | 94,000 |
Source: Item 22 — CONTRACTS (FDD page 46)
What This Means (2025 FDD)
According to Ledgers's 2025 Franchise Disclosure Document, the company's total deferred revenue at December 31, 2022, consisted of both current and non-current portions. The current portion of deferred revenue was $110,000, while the non-current portion was $711,614. Therefore, the total deferred revenue, combining both current and non-current liabilities, amounted to $821,614 as of that date.
Deferred revenue represents payments Ledgers has received for services or products that have not yet been fully provided or delivered. This is a common accounting practice, especially in franchise systems where initial franchise fees may be recognized over the term of the franchise agreement. The current portion represents revenue expected to be recognized within the next year, while the non-current portion is for periods beyond that.
For a prospective Ledgers franchisee, understanding deferred revenue is important because it reflects the company's obligations to provide future services. A significant deferred revenue balance suggests that Ledgers has a pipeline of future revenue streams, but also corresponding obligations. Reviewing the trend of deferred revenue over several years can provide insights into the sustainability and growth of Ledgers's revenue model.
It is also worth noting that during the year ended December 31, 2023, Ledgers had to make a prior period adjustment due to a terminated franchise agreement, which involved writing off a note receivable and associated deferred revenue. While this adjustment occurred after the period in question (December 31, 2022), it highlights the importance of accurate accounting practices and the potential impact of franchise terminations on the company's financial statements.