What was the total revenue Carls received from franchise fees in fiscal year 2022?
Carls Franchise · 2024 FDDAnswer from 2024 FDD Document
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Source: Item 21 — FINANCIAL STATEMENTS (FDD pages 79–80)
What This Means (2024 FDD)
According to Carls's 2024 Franchise Disclosure Document, the total revenue from franchise fees in fiscal year 2022 was $4,182. This figure represents the income Carls recognized from fees paid by franchisees. These fees are typically related to initial franchise agreements, training, renewals, and transfers.
For a prospective franchisee, this indicates the scale of franchise fee revenue Carls generates. It is important to note that these fees are recognized over the contractual term of the franchise agreement once the restaurant has opened. This revenue stream is crucial for Carls as it supports their franchise operations and expansion efforts.
It's also worth noting that Carls defers franchise fees when received and recognizes them as revenue over the term of the franchise agreement. This accounting practice aligns the revenue recognition with the service provided to the franchisee over time. Understanding the franchise fee revenue helps potential franchisees gauge the financial health and stability of Carls's franchise system.