How does Carbones Pizzeria determine the transaction price in a contract with a customer?
Carbones_Pizzeria Franchise · 2025 FDDAnswer from 2025 FDD Document
Revenue is recognized when control of the promised products or services are transferred to the Company's customers, in an amount that reflects the consideration the Company expects to be entitled to for those products and services. In general, the Company determines revenue recognition through the following steps:
- · Identification of the contract, or contracts, with customers;
- · Identification of the performance obligation(s) in the contract;
- · determination of the contract price;
- · Allocation of the transaction price to the performance obligations in the contract;
- · Recognition of revenue when, or as, the Company satisfies a performance obligation.
Source: Item 22 — CONTRACTS (FDD page 30)
What This Means (2025 FDD)
According to Carbones Pizzeria's 2025 Franchise Disclosure Document, the company recognizes revenue when control of products or services are transferred to customers. This recognition occurs in an amount that reflects the consideration the company expects to receive for those products and services.
Carbones Pizzeria determines revenue recognition through a series of steps. These steps include identifying the contract with customers, identifying the performance obligations within the contract, determining the contract price, allocating the transaction price to the performance obligations, and recognizing revenue when the company satisfies a performance obligation.
For a Carbones Pizzeria franchisee, this means that revenue from customer sales is recognized at the point of sale. The price is determined at the time of the transaction, reflecting what the customer pays for the products or services received. This is a standard practice in the restaurant industry, where revenue is typically recognized immediately upon the completion of a sale.