When does Casa De Corazon recognize revenue from royalties?

According to Casa De Corazon's 2025 Franchise Disclosure Document, revenue from royalties is recognized in the period in which the franchisee earns the revenue upon which the royalty fee is based. The royalty fees are calculated as a percentage of the gross revenue earned by the franchisee.

This means that Casa De Corazon does not recognize royalty revenue until the franchisee has actually earned the sales revenue that triggers the royalty payment. This is a common practice in franchising, as it directly links the franchisor's royalty income to the franchisee's sales performance.

For a prospective Casa De Corazon franchisee, this revenue recognition policy means that the franchisor's financial success is tied to the franchisee's ability to generate revenue. This alignment of interests can be a positive factor for franchisees, as it incentivizes the franchisor to provide support and resources that help franchisees grow their businesses.