How does Benjamin Franklin Plumbing recognize revenue for its software service, and over what period is it recognized?
Benjamin_Franklin_Plumbing Franchise · 2025 FDDAnswer from 2025 FDD Document
ng a buying program that connects the vendors with the Company's franchisee and company-owned customers are recognized as revenue and as a reduction of expense, respectively, as they become due, which is generally on a monthly basis. Rebates are calculated as a percentage of third-party sales. The Company recognized $11,438, $16,023 and $16,208 of rebates in other revenue on the consolidated statements of comprehensive loss for the years ended December 31, 2024, 2023 and 2022, respectively. The Company recognized $1,618, $1,842 and $1,926 of rebates in residential service expenses on the consolidated statements of comprehensive loss for the years ended December 31, 2024, 2023 and 2022, respectively.
Software Service Revenue
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Source: Item 22 — CONTRACTS (FDD pages 87–88)
What This Means (2025 FDD)
According to the 2025 Benjamin Franklin Plumbing FDD, the company recognizes software service revenue on a straight-line basis over the contractual term, starting when the customer gains access to the software service. This revenue is derived from the company's software and mobile product services, which are provided continuously throughout the contractual period. Typically, Benjamin Franklin Plumbing bills for these software services monthly. The company considers its performance obligation to be satisfied evenly over the duration of the contract.
For the years ending December 31, 2024, 2023, and 2022, Benjamin Franklin Plumbing recognized $6,448, $6,632, and $7,084, respectively, in software service revenue. These figures are included in franchise service fees on the consolidated statements of operations.
This method of revenue recognition is common for software-as-a-service (SaaS) businesses, where the service is delivered continuously over a period of time. By recognizing revenue in this way, Benjamin Franklin Plumbing aligns its financial reporting with the actual delivery of the software service to its franchisees. This approach provides a consistent and predictable revenue stream for the company, reflecting the ongoing nature of the service provided.