What was the amount of advertising funds assets for Moes Southwest Grill as of December 31, 2023?
Moes_Southwest_Grill Franchise · 2025 FDDAnswer from 2025 FDD Document
audit in accordance with US GAAS, we:
- Exercise professional judgment and maintain professional skepticism throughout the audit.
- Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.
- Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Comp
Source: Item 23 — Receipts (FDD pages 92–334)
What This Means (2025 FDD)
According to Moe's Southwest Grill's 2025 Franchise Disclosure Document, the advertising funds assets totaled $7,643 as of December 31, 2023. This figure represents the financial resources specifically designated for advertising and marketing activities within the Moe's Southwest Grill system. These assets primarily consist of accounts receivable from franchisees and the Company SBRs for contributions to the Ad Funds and Local Funds, vendor receivables, and prepayments to certain advertising and marketing vendors.
Advertising funds are collected from franchisees based on a percentage of their revenues, as stipulated in their franchise agreements and the Company SBRs. These funds are then used for both national and local advertising initiatives. The advertising funds are split into Ad Funds and Company-Managed Local Funds. The revenues and expenses of these funds are reflected in the consolidated statements of operations as Advertising funds revenues and Advertising funds expenses, respectively.
For a prospective Moe's Southwest Grill franchisee, understanding the advertising fund assets is crucial because it indicates the financial backing available for marketing efforts. A healthy balance in these funds can support various advertising campaigns, potentially driving more business to individual franchise locations. It's also important to note that the company records the billing, collection, and subsequent distribution of the Franchisee-Managed Local Funds as pass-through transactions within Advertising funds assets and Advertising funds liabilities. This means that these funds are managed separately and are not included in the consolidated statements of operations.