What pre-opening services may Antioch Pizza Shop provide to franchisees?
Antioch_Pizza_Shop Franchise · 2025 FDDAnswer from 2025 FDD Document
In addition, the practical expedient allows franchisors to account for pre-opening services as a single distinct performance obligation, which the Company has elected to adopt. These pre-opening services include the following (which the Company may or may not provide all of):
- Assistance in the selection of a site
- Assistance in obtaining facilities and preparing the facilities for their intended use, including related financing, architectural, and engineering services, and lease negotiation
- Training of the franchisee's personnel or the franchisee
- Preparation and distribution of manuals and similar material concerning operations, administration, and record keeping
- Bookkeeping, information technology, and advisory services, including setting up the franchisee's records and advising the franchisee about income, real estate, and other taxes about local regulations affecting the franchisee's business
- Inspection, testing, and other quality control programs
Source: Item 21 — Financial Statements (FDD page 56)
What This Means (2025 FDD)
According to Antioch Pizza Shop's 2025 Franchise Disclosure Document, the company may provide several pre-opening services to franchisees. These services are considered a single distinct performance obligation for accounting purposes. The FDD specifies that Antioch Pizza Shop may or may not provide all of these services.
The potential pre-opening services include assistance in site selection, help with obtaining and preparing facilities (including financing, architectural, and engineering services, and lease negotiation), and training for the franchisee or their personnel. Antioch Pizza Shop may also provide preparation and distribution of operations, administration, and record-keeping manuals.
Additionally, Antioch Pizza Shop may offer bookkeeping, IT, and advisory services, such as setting up records and advising on income, real estate, and other taxes, as well as local regulations. The company may also provide inspection, testing, and other quality control programs. The document indicates that the standalone selling price of these pre-opening services exceeds the initial franchise fee, and the company allocates the entire initial franchise fee to these services, recognizing revenue upon completion of the services, typically when the franchised location begins operations.
Prospective franchisees should confirm with Antioch Pizza Shop which specific pre-opening services they will receive as part of their franchise agreement. Understanding the scope of these services is crucial for budgeting and planning the launch of their Antioch Pizza Shop location.