How does Checkers record revenue from delivery sales?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
pon the delivery of the food to the customer. The consideration is variable generally due to coupons and discounts which are recorded at the time of food delivery.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
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.
The franchise fees performance obligation is satisfied over the terms of the franchise agreement between the Company and the related franchisees. The franchise royalties performance obligation is satisfied upon the delivery of the food by the franchisee to their customer or to a third-party delivery partner. The Company recognizes the royalty revenue in the period in which the franchise sales occur over the contract term of the franchise agreement.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 91)
What This Means (2025 FDD)
According to Checkers' 2025 Franchise Disclosure Document, the company recognizes revenue from delivery sales differently depending on whether it's a company-operated restaurant or a franchised location. For company-operated restaurants, revenue is recognized upon delivery of food to the customer, with consideration given to coupons and discounts at the time of delivery. Payment is expected immediately upon delivery.
When Checkers uses a third-party delivery partner, it acts as an agent. In this case, Checkers records the revenue net of costs, including commissions, fees, and sometimes taxes. The delivery partner handles the web and mobile applications and directly interacts with the end customer, scheduling the restaurant to prepare and deliver the food. Checkers typically receives net revenue from these sales within 2 to 7 days from the end of the week of the sale. The delivery sales revenue can vary depending on the service costs and the specific delivery partner involved.
For franchised restaurants, the franchise royalties performance obligation is satisfied upon the delivery of the food by the franchisee to their customer or to a third-party delivery partner. Checkers recognizes the royalty revenue in the period in which the franchise sales occur over the contract term of the franchise agreement. This means that a portion of the revenue from each delivery sale at a franchised location contributes to the royalty revenue that Checkers recognizes over the life of the franchise agreement.