How does Belocal recognize revenue earned from sales services provided to N2 Company?
Belocal Franchise · 2025 FDDAnswer from 2025 FDD Document
nchise agreement.
Sales services revenue
Pursuant to a services agreement with N2 Company, the Company provides sales services which includes the management of the system of selling print advertising by its Franchised Businesses in one or more of N2 Company's publications. This revenue is recognized as earned.
Advertising and marketing
All costs associated with advertising and marketing are expensed in the period incurred.
2. Significant Accounting Policies (continued)
Income Taxes
The Company is taxed as a C-Corporation. Income taxes are provided for the tax effects of transactions reported in the financial statements and consist of taxes currently due plus deferred taxes. Deferred income taxes are provided for the temporary differences in basis of the Company's assets and liabilities and their reported amounts. The deferred tax assets and liabilities represent the future tax consequences of those differences, which will either be taxable or deductible when the assets and liabilities are recovered or settled.
Source: Item 23 — RECEIPTS (FDD pages 71–242)
What This Means (2025 FDD)
According to Belocal's 2025 Franchise Disclosure Document, revenue from sales services provided to N2 Company is recognized as it is earned. These sales services include the management of the system of selling print advertising by Belocal's Franchised Businesses in one or more of N2 Company's publications.
For the years ending June 30, 2025, 2024, and 2023, Belocal's sales services revenue from N2 Company amounted to $82,501,921, $77,450,854, and $77,776,240, respectively. This revenue is included in the sales services revenue reported in Belocal's statements of operations.
It is important to note that Belocal derives its sales services revenue from a single customer, its affiliate, N2 Company. Belocal provides credit to N2 Company in the normal course of business and does not require collateral. Prospective franchisees should be aware of this related-party transaction and the potential risks associated with relying on a single customer for a significant portion of revenue. Belocal also receives accounting, marketing, and other operating services from N2 Company, with costs of $6,624,000, $6,048,000 and $4,800,000 for the years ended June 30, 2025, 2024 and 2023, respectively.