How does Checkersrallys recognize revenue from third-party delivery companies?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
nized upon delivery of food to the customer at Company-operated restaurants. "Restaurant sales" are recognized upon sale and are presented net of coupons and discounts, sales tax and other sales-related taxes. Revenue is recognized when the food is purchased by the customer, which is when our performance obligation is satisfied. "Restaurant sales" also includes revenues recognized upon delivery of food to a third-party delivery company. The revenue is recognized as a receivable from the third-party delivery service and collection is made within three to seven business days. Delivery sales are recognized net of commissions, fees, taxes, and discounts.
"Franchise and retail royalty revenue" includes royalties on sales by franchised restaurants and sales of licensed products in retail stores. Royalties are based on a percentage of sales of the franchised restaurant and sales of licensed products in retail stores which are recognized as earned.
"Franchise fees and other income" is comprised of franchise fees, transfer fees, and area development fees that are generated from the sale of rights to develop, own and operate restaurants, as well as sublease rental income and revenues from advertising cooperative funds.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 91)
What This Means (2025 FDD)
According to Checkersrallys's 2025 Franchise Disclosure Document, revenue from third-party delivery companies is included under "Restaurant sales". Checkersrallys recognizes this revenue upon delivery of food to the third-party delivery company. This revenue is recorded as a receivable from the delivery service, with payment typically received within three to seven business days. Delivery sales are reported net of commissions, fees, taxes, and discounts.
Checkersrallys acts as an agent in delivery sales, recording revenue net of costs such as commissions, fees, and sometimes taxes. The delivery partner handles web and mobile applications and directly interacts with the end customer. The delivery partner arranges for the restaurant to prepare and deliver the food to one of their employees. Net revenue is generally paid within 2 to 7 days from the end of the week of sale, and the revenue varies by the costs of the service and by delivery partner.
For a prospective Checkersrallys franchisee, this means that when a customer orders through a third-party delivery service, the restaurant recognizes the sale once the food is handed off to that delivery service. The franchisee will not receive the full price of the menu item, as Checkersrallys only records the net amount after deducting costs like commissions and taxes charged by the delivery service. Franchisees can expect to receive payment from the third-party delivery service within a week or so, but the exact amount will depend on the specific agreement with the delivery service and any applicable fees or commissions.