According to All County's accounting policy, when are revenues recognized?
All_County Franchise · 2025 FDDAnswer from 2025 FDD Document
The Company's policy is to prepare its financial statements on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America. Revenues are recognized when earned, and expenses are recognized as they are incurred.
Revenue from sales of individual franchises is recognized and earned for the initial non-recurring and non-refundable fee upon execution of the agreement with the franchisee whenever allowable under applicable state laws. The initial franchise fee is generally recognized ³ZKen DOO material services or conditions relating to the sale have been substantially perIorPed or sDtisIied E\ tKe IrDnFKisor´ (typically, upon the opening of the franchise location).
Revenues from royalties are earned each calendar month as a percentage of gross revenues and are payable the following month. The Company recognizes income for financial statement purposes and records the receivable in the accounting period it was earned.
Source: Item 22 — Contracts (FDD page 43)
What This Means (2025 FDD)
According to All County's 2025 Franchise Disclosure Document, the company prepares its financial statements using the accrual basis of accounting, in accordance with generally accepted accounting principles in the United States of America. This means that All County recognizes revenues when they are earned and expenses when they are incurred.
Specifically, All County recognizes revenue from sales of individual franchises for the initial non-recurring and non-refundable fee upon the execution of the agreement with the franchisee, provided this is allowable under applicable state laws. Generally, the initial franchise fee is recognized when all material services or conditions relating to the sale have been substantially performed or satisfied by the franchisor, typically upon the opening of the franchise location.
Revenues from royalties are earned each calendar month as a percentage of gross revenues and are payable the following month. All County recognizes income for financial statement purposes and records the receivable in the accounting period it was earned. This approach aligns with standard accounting practices, ensuring that revenues and expenses are matched to the periods in which they are earned or incurred, providing a more accurate financial representation of the company's performance.