What was the deferred franchise fee revenue for Pearce Bespoke in 2023?
Pearce_Bespoke Franchise · 2025 FDDAnswer from 2025 FDD Document
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Wexford, Pennsylvania
May 24 2024
PEARCE BESPOKE FRANCHISING, LLC BALANCE SHEETS
ASSETS
| As of December 31, | ||||
|---|---|---|---|---|
| 2023 | 2022 | |||
| Current Assets: Cash Accounts receivable Deferred consulting fee | $ | 170,147 22,188 71,458 | $ | 46,811 - 2,500 |
| Total Current Assets | 263,793 | 49,311 | ||
| Deposits | 2,198 | - | ||
| Deferred Consulting Fee | 619,728 | 22,500 | ||
| Right-of-Use Asset - Operating Lease | 43,692 | - | ||
| Total Assets | $ | 929,411 | $ | 71,811 |
| LIABILITIES AND MEMBERS' EQUITY (DEFICIENCY) | ||||
| Current Liabilities: Accounts payable Related party payables Accrued payroll and payroll taxes Deferred franchise fee revenue Operating lease liability - current | $ | 80,525 692 23,621 129,693 22,822 | $ | 7,591 - 5,339 5,100 - |
| Total Current Liabilities | 257,353 | 18,030 | ||
| Deferred Franchise Fee Revenue | 1,123,022 | 45,900 | ||
| Operating Lease Liability, net | 21,020 | - | ||
| Total Liabilitie |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 39)
What This Means (2025 FDD)
According to Pearce Bespoke's 2025 Franchise Disclosure Document, the deferred franchise fee revenue as of December 31, 2023, was $129,693. This figure represents the portion of initial franchise fees that Pearce Bespoke has collected but not yet recognized as earned revenue.
Pearce Bespoke defers recognition of initial franchise fee revenue until it has performed substantially all of the initial services required by the franchise agreement. This accounting practice is common in franchising because the initial fee often covers training, site selection assistance, and other pre-opening support provided to the franchisee. The deferred revenue is then recognized over the term of the franchise agreement, which for Pearce Bespoke is ten years.
For a prospective Pearce Bespoke franchisee, the deferred franchise fee revenue indicates the amount of future revenue that Pearce Bespoke expects to recognize from previously collected franchise fees. It reflects the company's ongoing obligation to provide services and support to its franchisees over the life of their agreements. Monitoring this deferred revenue can provide insight into the stability and future revenue streams of Pearce Bespoke.