When are merchandise sales revenues recognized by Bhc?

According to Bhc's 2025 Franchise Disclosure Document, merchandise sales revenues, which primarily consist of sales of food, equipment, and supplies to franchisees, are recognized at a specific point in time. This recognition occurs when Bhc has fulfilled its obligations and the merchandise is successfully delivered to the franchisees.

This means that Bhc does not recognize the revenue from these sales until the franchisees actually receive the goods. This is a standard accounting practice that ensures revenue is recognized only when it is earned and the company has completed its part of the transaction. For a prospective franchisee, this indicates that Bhc's financial reporting is based on actual delivery and completion of the sale, which can provide a more accurate view of the company's financial performance.

This policy is important for franchisees to understand because it clarifies when Bhc recognizes revenue related to the supplies they purchase. It aligns revenue recognition with the physical transfer of goods, which is a transparent and verifiable event. Franchisees can be confident that Bhc's reported revenues are tied to actual deliveries of merchandise, rather than just order placements or billing events.