How does Auntie Annes recognize ice cream mix revenues?
Auntie_Annes Franchise · 2024 FDDAnswer from 2024 FDD Document
Certain franchisees are required to purchase ice cream mix from a certain Franchising Entity's approved distributors, who in turn source the ice cream mix from that Franchising Entity's approved manufacturers. Ice cream mix revenues are recognized upon the sale of ice cream mix based upon the respective agreements with the manufacturers, distributors, and the franchisees.
Source: Item 23 — RECEIPTS (FDD pages 106–366)
What This Means (2024 FDD)
According to Auntie Annes's 2024 Franchise Disclosure Document, certain franchisees are required to purchase ice cream mix from approved distributors, who obtain the mix from approved manufacturers. Auntie Anne's recognizes ice cream mix revenues upon the sale of the ice cream mix. This recognition is based on the agreements established with the manufacturers, distributors, and the franchisees.
For a prospective franchisee, this means that a portion of their required purchases contributes to Auntie Anne's revenue stream. The revenue recognition is tied directly to the sale of the ice cream mix within this supply chain, ensuring that Auntie Anne's benefits from these sales based on pre-existing agreements.
This arrangement highlights the importance of understanding the relationships between Auntie Anne's, its subsidiaries, and its approved manufacturers and distributors. Franchisees should be aware that their purchase obligations directly impact the franchisor's revenue recognition and overall financial performance.