When is the restaurant sales performance obligation satisfied for Checkersrallys?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
. The Company adopted this pronouncement effective January 3, 2023 and determined that it had no material impact on the consolidated financial statements and related disclosures.
NOTE 3 - REVENUE
Performance Obligations in Contracts with Customers
The restaurant sales performance obligation is satisfied upon the delivery of food to the customer at Company-operated restaurants. The payment terms are immediately satisfied upon 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.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 91)
What This Means (2025 FDD)
According to Checkersrallys's 2025 Franchise Disclosure Document, the restaurant sales performance obligation is satisfied when food is delivered to the customer at company-operated restaurants. Payment is due immediately upon delivery. The price can vary due to coupons and discounts, which are recorded at the time of delivery.
For delivery sales through a third-party, Checkersrallys recognizes revenue differently. The performance obligation is satisfied when the food is delivered to the third-party delivery partner. Checkersrallys acts as an agent in these transactions, recording revenue net of costs like commissions, fees, and sometimes taxes. The net revenue from these delivery sales is generally paid within 2 to 7 days from the end of the week of the sale.
For 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.