How does Canine Dimensions recognize the balance of the initial fees, which amounts to $35,000?
Canine_Dimensions Franchise · 2025 FDDAnswer from 2025 FDD Document
erritory fee upon the conclusion of the initial training.
As such the Company recognizes as revenue upon the completion of training $12,500. The balance of initial fees results in $35,000 ratably recognized over
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 35)
What This Means (2025 FDD)
According to Canine Dimensions' 2025 Franchise Disclosure Document, the company recognizes franchise revenue in stages. Upon completion of the initial training, Canine Dimensions recognizes $12,500 as revenue. The remaining balance of the initial franchise fees, which amounts to $35,000, is recognized ratably over the term of the franchise agreement.
For a prospective franchisee, this means that while the initial franchise fee is $47,500 ($12,500 + $35,000), Canine Dimensions does not recognize the entire amount as revenue immediately. Instead, they recognize $12,500 upfront and then spread the remaining $35,000 out as revenue over the length of the franchise agreement, which is either ten or five years depending on the agreement.
This accounting practice reflects that Canine Dimensions provides ongoing services and support to franchisees throughout the term of the agreement, justifying the deferred revenue recognition. This approach is common in franchising, as it aligns revenue recognition with the delivery of ongoing services and the use of the brand's trademarks and operating systems.