How does Checkers recognize revenue from delivery sales, and what costs are deducted?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
The delivery sales performance obligation is satisfied upon the delivery of food to a third-party delivery partner. The Company acts as an agent in delivery sales and, therefore, records the revenue net of costs which include commissions, fees, and in certain cases taxes. In a delivery sale the Company has arranged for another party to transfer the food to an end-customer. The delivery partner maintains the costs of web and mobile applications and directly transacts with the end-customer. The delivery partner then schedules for the restaurant to prepare and deliver the food to one of the delivery partner's employees. The net revenue is generally paid in terms of 2 to 7 days from the end of the week of sale. Delivery sales revenue varies by the costs of the service and by delivery partner.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 91)
What This Means (2025 FDD)
According to Checkers' 2025 Franchise Disclosure Document, revenue from delivery sales is recognized when the food is delivered to a third-party delivery partner. Checkers acts as an agent in these transactions. This means that Checkers does not record the gross sale amount as revenue.
Instead, Checkers records the revenue net of certain costs. These costs include commissions, fees, and in some instances, taxes. The delivery partner handles the web and mobile applications and directly interacts with the end customer. The delivery partner arranges for the restaurant to prepare the food and deliver it to one of their employees.
The net revenue from these delivery sales is typically paid to Checkers within 2 to 7 days from the end of the week in which the sale occurred. The actual revenue Checkers receives from delivery sales can vary depending on the costs of the delivery service and the specific delivery partner involved.