What was the amount of Spray Net's franchise revenues in 2023?
Spray_Net Franchise · 2025 FDDAnswer from 2025 FDD Document
orting period. Actual results could vary from those estimates.
3. REVENUE RECOGNITION
In May 2014, the FASB issued a new accounting standard ASU No. 2014-09, "Revenue from Contracts with Customers (Topic 606)", that attempts to establish a uniform basis for recording revenue to virtually all industries' financial statements. The revenue standard's core principle is to recognize revenue when promised goods or services are transferred to customers in an amount that reflects the consideration expected to be received for those goods or services. The new standard changes how the Company records in
Source: Item 23 — RECEIPTS (FDD pages 75–219)
What This Means (2025 FDD)
According to Spray Net's 2025 Franchise Disclosure Document, the company records non-refundable franchise fees, net of amounts earned based on allowable direct services, as deferred revenues, to be recognized over the life of the franchise agreement. As of December 31, 2023, these non-refundable franchise fees received but not yet earned totaled $3,134,425.
This figure represents the cumulative amount of franchise fees that Spray Net has collected from franchisees but has not yet recognized as earned revenue under accounting standards. The revenue recognition occurs over the term of the franchise agreement.
For a prospective franchisee, this indicates the scale of upfront investment made by other franchisees and the corresponding liability Spray Net carries to deliver services and support over the life of those franchise agreements. It does not reflect Spray Net's total revenue, which would include royalties and other fees.