What was the total amount of franchise fees collected by Mr. Sandless in 2022?

According to Mr. Sandless's 2025 Franchise Disclosure Document, the company recorded non-refundable franchise fees that were received but not yet earned as of December 31, 2022, totaling $360,810. These fees are net of amounts earned based on allowable direct services.

Mr. Sandless recognizes these non-refundable franchise fees as deferred revenues, in compliance with Financial Accounting Standards Board (FASB) standards, specifically Topic 606 on revenue recognition. This means that instead of recognizing the entire franchise fee as revenue immediately upon receipt, Mr. Sandless defers the recognition over the life of the franchise agreement.

For a prospective franchisee, this accounting practice means that Mr. Sandless isn't immediately recognizing all franchise fee revenue. The initial franchise fee you pay to Mr. Sandless is recognized as revenue by the franchisor gradually over the term of your franchise agreement. This accounting method provides a more accurate picture of the franchisor's financial performance over time, aligning revenue recognition with the delivery of ongoing services and support to franchisees.