What was the total amount of franchise fees Mr. Sandless collected in 2021?

According to Mr. Sandless's 2025 Franchise Disclosure Document, the company records non-refundable franchise fees, net of amounts earned based on allowable direct services, as deferred revenues. These are recognized over the life of the franchise agreement. As of December 31, 2021, Mr. Sandless had received $263,080 in non-refundable franchise fees that were not yet earned.

This means that Mr. Sandless collected $263,080 in franchise fees during 2021, but this revenue was not fully recognized on their income statement at that time. Instead, it was deferred and will be recognized over the term of the franchise agreements. This accounting practice is in compliance with Financial Accounting Standards Board (FASB) standards for revenue recognition.

For a prospective franchisee, this deferred revenue recognition means that Mr. Sandless's reported revenue in 2021 may not fully reflect the cash inflows from franchise fees received during that year. It's important to consider this when analyzing Mr. Sandless's financial statements, as the deferred revenue represents a future obligation to provide services or fulfill the franchise agreement. Franchisees should also note that these fees are non-refundable.