What was the amount of deferred revenue for Mr. Sandless in 2022?

According to Mr. Sandless's 2025 Franchise Disclosure Document, the deferred franchise fees as of December 31, 2022, were $360,810. These are non-refundable franchise fees that Mr. Sandless received but had not yet earned.

Deferred revenue represents payments Mr. Sandless has received for services or products that will be delivered in the future. In this case, the fees are recognized over the life of the franchise agreement. This accounting practice complies with Financial Accounting Standards Board (FASB) standards for revenue recognition.

For a prospective franchisee, this indicates that Mr. Sandless recognizes initial franchise fees over the term of the franchise agreement rather than recognizing the entire amount upfront. This is a common practice in franchising and provides a more accurate picture of the company's revenue recognition over time. The deferred revenue balance reflects the unearned portion of these initial fees as of the balance sheet date.