What was the advertising and promotional fund revenue for Precision Door Service in 2022?
Precision_Door_Service Franchise · 2025 FDDAnswer from 2025 FDD Document
0 335,404 (4,769) | $ 2,944,568 168,428 (22,873) | | Total Member's Equity | 3,111,215 | 3,090,123 | | Total liabilities and member's equity | $ 3,198,931 | $ 3,161,602 |
Combined Statements of Operations and Comprehensive Income ($000's)
| For the years ended December 31, | 2023 | (Restated) 2022 |
|---|---|---|
| Revenues and income | ||
| Franchise service fees | $ 169,842 | 152,248 |
| Synthetic royalties and master license fees | 28,705 | 22,879 |
| Franchise sales fees | 36,783 | 13,642 |
| Sales of products and services | 143,807 | 123,984 |
| Advertising and promotional fund revenue | 42,404 | 39,184 |
| Other | 30,338 | 32,014 |
| revenue | ||
| Total revenues and income | 451,879 | 383,951 |
| Cost of Sales | ||
| Products and services | 68,752 | 62,493 |
| Gross Profit | 383,127 | 321,458 |
| Selling expense | 6,939 | 8,274 |
| General and administrative expense | 18,705 | 9,033 |
| Advertising and promotional fund expense | 47,365 | 42,987 |
| Depreciation and amortization | 97,290 | 82,921 |
| Management expenses |
Source: Item 21 — Financial Statements (FDD page 91)
What This Means (2025 FDD)
According to Precision Door Service's 2025 Franchise Disclosure Document, the advertising and promotional fund revenue for the year ended December 31, 2022, was $39,184, as shown in the combined financial statements. A separate statement shows the advertising and promotional fund revenue for the year ended December 31, 2022, was $50,870. The manager is assigned by each SPV Franchisor to collect marketing, advertising, and promotional (MAP) fees and maintain the MAP fund.
The MAP fund is administered by the Manager, who keeps unused MAP fees in segregated bank accounts and uses them for marketing and promotion of individual businesses. Precision Door Service has determined that it acts as the principal in transactions related to MAP fund contributions and expenditures. These contributions and expenditures are reported on a gross basis in the Combined Statements of Operations and Comprehensive Income.
MAP fund fees are recognized as advertising and promotion fund revenue when related sales occur, based on the sales-based royalty exception within ASC 606, Revenue from contracts with customers. This means that the advertising revenue is tied directly to sales performance, ensuring that marketing efforts are aligned with revenue generation. Prospective franchisees should understand how these funds are collected, managed, and utilized, as they directly impact the brand's marketing efforts and, consequently, their potential customer reach and sales.