What distinct performance obligations does Canine Dimensions consider to be one-time in nature?
Canine_Dimensions Franchise · 2025 FDDAnswer from 2025 FDD Document
The Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers, which supersedes the existing transaction and industry-specific revenue recognition guidelines. The new guidance requires the recognition of revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Originally the ASU was effective for fiscal years beginning after December 15, 2018 however due to the worldwide pandemic, implementation was delayed a year.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 35)
What This Means (2025 FDD)
Based on the 2025 Canine Dimensions Franchise Disclosure Document, Note 5 addresses franchise revenue recognition. It states that the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers, which supersedes the existing transaction and industry-specific revenue recognition guidelines.
The new guidance requires the recognition of revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Originally the ASU was effective for fiscal years beginning after December 15, 2018 however due to the worldwide pandemic, implementation was delayed a year.
While this note discusses revenue recognition and the adoption of new accounting standards, it does not specifically list or define which performance obligations Canine Dimensions considers to be one-time in nature. A prospective franchisee should seek clarification from Canine Dimensions regarding the specific one-time performance obligations associated with the franchise agreement to fully understand how revenue is recognized and when obligations are considered fulfilled.