What was the total value of Spray Net's contract assets at the end of 2022?
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 recognizes revenue based on accounting standards for contracts with customers. As part of these standards, Spray Net records non-refundable franchise fees, net of amounts earned based on allowable direct services, as deferred revenues, which are recognized over the life of the franchise agreement.
As of December 31, 2022, the non-refundable franchise fees received but not yet earned were $3,355,822. Additionally, the prepaid commissions as of December 31, 2022, were $2,285,041.
These figures represent significant liabilities and assets on Spray Net's balance sheet, reflecting the company's obligations to provide services and the value of prepaid expenses. For a prospective franchisee, understanding these figures provides insight into the financial structure of Spray Net and how revenue and expenses are accounted for.