Revenue Disclosures

3 Months Ended

Mar. 26, 2023

Revenue from Contract with Customer [Abstract]

Revenue Disclosures

6. Revenue Disclosures

Contract Liabilities

Contract liabilities primarily consist of deferred franchise fees and deferred development fees. Deferred franchise fees and deferred development fees of $5.6 million and $5.5 million were included in current other accrued liabilities as of March 26, 2023 and January 1, 2023, respectively. Deferred franchise fees and deferred development fees of $22.3 million and $22.7 million were included in long-term other accrued liabilities as of March 26, 2023 and January 1, 2023, respectively.

Changes in deferred franchise fees and deferred development fees for the first quarter of 2023 and the first quarter of 2022 were as follows:

	Fiscal Quarter Ended
	March 26,			March 27,
	2023			2022
Deferred franchise fees and deferred development fees, beginning of period	$	28,225		$	29,694
Revenue recognized during the period		(1,448	)		(1,420	)
New deferrals due to cash received and other		1,162			1,159
Deferred franchise fees and deferred development fees, end of period	$	27,939		$	29,433

Advertising Fund Assets

As of March 26, 2023, advertising fund assets, restricted of $139.9 million consisted of $119.8 million of cash and cash equivalents, $13.2 million of accounts receivable and $6.9 million of prepaid expenses. As of March 26, 2023, advertising fund cash and cash equivalents included $3.3 million of cash contributed from U.S. Company-owned stores that had not yet been expended.

As of January 1, 2023, advertising fund assets, restricted of $162.7 million consisted of $143.6 million of cash and cash equivalents, $13.1 million of accounts receivable and $6.0 million of prepaid expenses. As of January 1, 2023, advertising fund cash and cash equivalents included $4.8 million of cash contributed from U.S. Company-owned stores that had not yet been expended.

Change in Advertising Fund Contributions and Technology Fees

Subsequent to the end of the first quarter of 2023, as of March 27, 2023, Domino's National Advertising Fund Inc., the Company’s consolidated not-for-profit advertising subsidiary, effectuated a temporary reduction of 0.25% to its standard 6.0% advertising contribution, which is anticipated to be in effect for at least one year. Concurrently, the Company also increased the U.S. digital per-transaction technology fees that are recognized as the related U.S. franchise retail sales occur by $0.08 to $0.395 for the same time period.