What was the amount of revenue recognized during the fiscal year ended 2024 for Moes Southwest Grill?
Moes_Southwest_Grill Franchise · 2025 FDDAnswer from 2025 FDD Document
| Changes in deferred franchise and development fees are as follows: | |
|---|---|
| December 29, December 31, | |
| For the fiscal years ended: 2024 2023 | |
| Deferred revenue at the beginning of the year $ 49,115 $ 50,740 | |
| Revenue recognized during the year (9,152) (10,569) | |
| Deferrals due to cash received and other 13,425 8,944 | |
| Deferred revenue and Long-term deferred revenue $ 53,388 $ 49,115 |
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 revenue recognized during the fiscal year ended December 29, 2024, was $(9,152). This figure represents a portion of deferred revenue that Moes Southwest Grill recognized as income during that period. Deferred revenue typically includes franchise fees and development fees that have been collected but not yet earned, and are recognized over the term of the franchise agreement.
For a prospective franchisee, this indicates how Moes Southwest Grill accounts for its franchise and development fees. These fees are initially recorded as deferred revenue and then recognized as revenue on a straight-line basis over the term of the franchise agreement, commencing when the SBR (Store Business Restaurant) is opened. This accounting practice is standard in the franchise industry, as it aligns revenue recognition with the delivery of the franchise rights and ongoing support provided to franchisees.
The FDD also provides a table outlining changes in deferred franchise and development fees, showing the beginning deferred revenue, revenue recognized, deferrals due to cash received, and the ending deferred revenue. This level of detail can help potential franchisees understand the financial mechanics of how Moes Southwest Grill manages its revenue streams and obligations related to franchise agreements. Understanding these accounting practices can provide insight into the financial stability and revenue recognition policies of the franchisor.