What is the estimated revenue related to performance obligations that Bft expects to recognize in 2025?
Bft Franchise · 2025 FDDAnswer from 2025 FDD Document
| Contract liabilities to be recognized in revenue in | Amount |
|---|---|
| 2025 | $ 9,845 |
| 2026 | 10,091 |
| 2027 | 10,890 |
| 2028 | 11,572 |
| 2029 | 11,028 |
| Thereafter | 52,483 $ 105,909 |
Source: Item 23 — RECEIPTS (FDD pages 79–265)
What This Means (2025 FDD)
According to Bft's 2025 Franchise Disclosure Document, the company anticipates recognizing $9,845 in revenue during 2025 related to contract liabilities. These liabilities stem from performance obligations that were either unsatisfied or partially unsatisfied as of December 31, 2024. This revenue recognition is tied to franchise agreements with franchisees.
The performance obligation for Bft involves granting franchisees rights to access the company's intellectual property. This includes initial development, operational training, preopening support, and access to Bft's technology throughout the franchise term. The franchise agreements typically operate under ten-year terms, with options to renew for two additional five-year terms.
The initial franchise fees are non-refundable and are usually collected upon signing the franchise agreement. These fees are recorded as deferred revenue and recognized on a straight-line basis over the ten-year franchise life. Variable fees, such as royalty fees, marketing fees, and technology fees, are recognized as revenue when invoiced monthly.