What was the noncurrent deferred revenue for Precision Door Service at the end of 2023?
Precision_Door_Service Franchise · 2025 FDDAnswer from 2025 FDD Document
| For the years ended December 31, | 2023 | 2022 |
|---|---|---|
| Balance at beginning of period | $ 80,364 | $ 72,091 |
| Fees received from franchise owners | 49,188 | 26,170 |
| Franchise sales fee revenue recognized | (38,441) | (20,655) |
| Deferred revenue from acquisitions | - | 3,497 |
| Other changes in deferred revenue | 499 | (739) |
| Balance at end of period | 91,610 | 80,364 |
| Less: current portion | 17,760 | 15,688 |
| Deferred revenue noncurrent | $ 73,850 | $ 64,676 |
| For the years ended December 31, | 2023 | 2022 | ||
|---|---|---|---|---|
| Balance at beginning of period | $ | 68,226 | $ | 62,393 |
| Fees received from franchise owners | 47,447 | 24,518 | ||
| Franchise sales revenue recognized | (36,783) | (13,642) | ||
| Contributed from Manager | 4,386 | - | ||
| Other deferred revenue recognized | 531 | (5,043 ) | ||
| Balance at end of period | 83,807 | 68,226 | ||
| Less: current portion | 13,631 | 10,604 | ||
| Deferred revenue, noncurrent | $ | 70,176 | $ | 57,622 |
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 at the end of 2023 was reported in two different tables. One table indicates the noncurrent deferred revenue was $73,850, while another table shows it as $70,176. These discrepancies may be due to restatements or different accounting methods applied in the separate financial statements.
Deferred revenue represents payments Precision Door Service has received for goods or services that have not yet been fully earned. The noncurrent portion of this revenue is the amount not expected to be recognized as revenue within the next 12 months. For a franchisee, this figure indicates the financial obligations Precision Door Service has to its franchisees over the long term.
The difference in reported noncurrent deferred revenue could be material. A prospective franchisee should seek clarification from Precision Door Service regarding the discrepancy between these figures to understand the underlying accounting practices and ensure accurate financial assessment.
Understanding deferred revenue is crucial for assessing the financial stability and future obligations of Precision Door Service. Franchisees should pay close attention to how deferred revenue is recognized and managed, as it can impact the franchisor's ability to support its franchisees and invest in the brand.