What was the value of Pump It Up's deferred franchise fees as of December 31, 2024?
Pump_It_Up Franchise · 2025 FDDAnswer from 2025 FDD Document
| December 31, | December 31, | January 1, | ||
|---|---|---|---|---|
| 2024 | 2023 | 2023 | ||
| Accounts Receivable, Net | $ 194,642 | $ 298,737 | $ 534,575 | |
| Contract Liabilities: | ||||
| Other Deferred Revenue | $ 12,500 | $ 12,500 | $ 12,500 | |
| Deferred Franchise Fees | $ 73,967 | $ 40,467 | $ 51,967 |
Source: Item 23 — RECEIPTS (FDD pages 60–225)
What This Means (2025 FDD)
According to Pump It Up's 2025 Franchise Disclosure Document, the value of deferred franchise fees as of December 31, 2024, was $73,967. This figure represents the amount of franchise fees that Pump It Up has collected but not yet recognized as earned revenue, meaning the company still has an obligation to provide services or fulfill other requirements in exchange for these fees. This deferred revenue is a liability on Pump It Up's balance sheet until it is earned.
For a prospective Pump It Up franchisee, this deferred revenue figure provides insight into the financial health and accounting practices of the franchisor. It indicates that Pump It Up is appropriately deferring revenue recognition until it has met its obligations to franchisees. This is a common accounting practice in the franchise industry, as initial franchise fees often cover services provided over time, such as training, site selection assistance, and pre-opening support.
It's important to note that deferred franchise fees can fluctuate based on the number of new franchise agreements signed and the timing of revenue recognition. A higher deferred revenue balance could indicate strong franchise sales, while a lower balance might suggest fewer new agreements or faster revenue recognition due to quicker franchisee openings. Franchisees may want to compare this figure with previous years to identify trends and assess the company's growth and financial stability.
In addition to deferred franchise fees, the FDD also lists other financial data, such as accounts receivable and other deferred revenue. Reviewing these figures in conjunction with the deferred franchise fees can provide a more comprehensive understanding of Pump It Up's financial position. Prospective franchisees should consult with a financial advisor to fully analyze these financial statements and assess the overall financial health of the franchise system.