What are the primary sources of revenue for Care Plus Medical Ucc?
Care_Plus_Medical_Ucc Franchise · 2024 FDDAnswer from 2024 FDD Document
Revenues are primarily derived from franchise fees (one-time and recurring monthly fees). In accordance with Accounting Standards Codification (ASC) Topic 606, Revenue will be recognized when persuasive evidence of an arrangement exists, delivery has occurred, or services have been rendered, the seller's price to the buyer is fixed or determinable, and collectability is reasonable assured. The determination of whether fees and fixed or determinable and collection is reasonable assured involves the use of assumptions. Arrangement terms and customer information are evaluated to ensure that these criteria are met prior to recognition of revenue.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 41)
What This Means (2024 FDD)
According to Care Plus Medical Ucc's 2024 Franchise Disclosure Document, the company's revenues are primarily derived from franchise fees. These fees include both one-time initial franchise fees and recurring monthly fees paid by franchisees.
Care Plus Medical Ucc recognizes revenue in accordance with Accounting Standards Codification (ASC) Topic 606. This means that revenue is recognized when there is persuasive evidence of an arrangement, delivery has occurred or services have been rendered, the price is fixed or determinable, and collectability is reasonably assured. The determination of whether these criteria are met involves the use of assumptions and evaluation of arrangement terms and customer information.
Specifically, a portion of the initial franchise fees is allocated to pre-opening activities, some of which are not brand-specific and are accounted for as separate performance obligations. These non-brand-specific activities are recognized ratably as the services are rendered. The remaining portion of the franchisee fee, not allocated to pre-opening activities, is recorded as unearned revenue and is recognized over the term of the franchise agreement. This approach reflects how Care Plus Medical Ucc provides access to its intellectual property and supports franchisees in establishing their own locations.