What were the total franchise fees collected by Mr. Sandless in 2024?

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 revenues are recognized over the life of the franchise agreement. The franchise fees received but not yet earned as of December 31, 2024, were $291,000, while the unearned fees as of December 31, 2023, were $435,000.

This means that Mr. Sandless collected franchise fees during 2024, but $291,000 of those fees were not yet recognized as earned revenue by the end of the year based on accounting standards. The difference between the $435,000 in unearned fees at the end of 2023 and the $291,000 at the end of 2024 does not represent the total franchise fees collected in 2024. It represents the change in deferred revenue, meaning that Mr. Sandless recognized some of the deferred revenue from prior years during 2024, and also collected new franchise fees during 2024 that were not yet recognized as earned revenue.

For a prospective franchisee, this accounting practice means that the initial franchise fee paid to Mr. Sandless is not immediately recognized as revenue by the company. Instead, it is recognized gradually over the term of the franchise agreement. This accounting method provides a more accurate picture of the company's financial performance by matching the revenue with the services provided to the franchisee over time. A prospective franchisee may want to inquire about the total franchise fees collected during the year, as this figure is not explicitly stated.