What was the noncurrent deferred revenue for Precision Door Service as of December 31, 2024?
Precision_Door_Service Franchise · 2025 FDDAnswer from 2025 FDD Document
et | | | | | | | Intangible assets – | | 1,327,052 | | 1,425,724 | | | net | | | | | | | Goodwill | | 1,739,179 | | 1,741,101 | | | Other non-current assets | | 1,758 | | 2,128 | | | Total Assets | $ | 3,336,716 | $ | 3,459,395 | |
Consolidated Balance Sheets (continued) ($000's, except share and per share amounts)
| December 31, | ||||
|---|---|---|---|---|
| 2024 | 2023 | |||
| Liabilities and Stockholder's Equity | ||||
| Current Liabilities | ||||
| Trade accounts payable | $ | 17,856 | $ | 15,962 |
| Accrued liabilities | 48,074 | 56,589 | ||
| Deferred revenue - | 18,215 | 17,760 | ||
| current | ||||
| Current portion of long-term debt | 10,051 | 10,488 | ||
| Current portion of operating lease liabilities | 5,401 | 6,925 | ||
| Current portion of finance lease obligations | 5,941 | 4,426 | ||
| Total current liabilities | 105,538 | 112,150 | ||
| Long-term debt - | 1,571,110 | 1,451,356 | ||
| less current portion | ||||
| Operating lease obligations – | 15,639 | 21,302 | ||
| less current portion | ||||
| Finance lease obligations – | 10,278 | 10,187 | ||
| less current portion | ||||
| Deferred tax liabilities | 199,638 | 220,780 | ||
| Deferred revenue - | 74,718 | 73,850 | ||
| less current portion | ||||
| Other non-current liabilities | 1,616 | 1,696 | ||
| Commitments and Contingencies (Note 11) | ||||
| Stockholder's Equity | - | - | ||
| Common stock-par value $0.01 per share; 100 shares | ||||
| authorized, issued and outstanding |
Source: Item 21 — Financial Statements (FDD page 91)
What This Means (2025 FDD)
According to Precision Door Service's 2025 Franchise Disclosure Document, the noncurrent deferred revenue as of December 31, 2024, was $74,718. This figure represents revenue that Precision Door Service has received but not yet recognized as earned, and which is expected to be recognized beyond the next 12 months. This deferred revenue typically arises from franchise fees or other payments received upfront for services or products to be delivered in the future.
For a prospective Precision Door Service franchisee, understanding deferred revenue is crucial because it reflects the financial obligations the franchisor has to its franchisees. The noncurrent portion indicates long-term commitments, which could include ongoing support, training, or other services promised as part of the franchise agreement. This figure, along with the current portion of deferred revenue, provides insight into the sustainability of the franchisor's revenue streams and its ability to meet future obligations.
It's important to note that deferred revenue is a common accounting practice in franchising, where initial franchise fees are often recognized over the term of the franchise agreement. Monitoring the changes in deferred revenue from year to year can provide a franchisee with a sense of the company's growth and stability. A significant decrease in deferred revenue could signal challenges in new franchise sales or renewals, while a steady or increasing balance suggests a healthy and expanding franchise system. Therefore, prospective franchisees should analyze these trends in conjunction with other financial metrics to assess the overall financial health of Precision Door Service.