How does Coffee News recognize revenue from the sale of franchises?

According to Coffee News' 2025 Franchise Disclosure Document, revenue from franchise sales is recognized over the term of the initial franchise agreement, which is generally four years. This means that Coffee News does not recognize the entire franchise fee as revenue immediately upon the sale of a franchise. Instead, it spreads the recognition of this revenue over the four-year period that the franchise agreement is in effect.

This accounting practice is common in the franchise industry because the franchisor has ongoing obligations to the franchisee throughout the term of the agreement. In the case of Coffee News, these obligations include providing franchisees with weekly content and other support. By recognizing revenue over time, Coffee News matches the revenue with the services it provides to franchisees.

For a prospective Coffee News franchisee, this revenue recognition policy is important because it reflects the ongoing relationship between the franchisee and franchisor. It also provides insight into how Coffee News manages its finances and recognizes its income, which can be a factor in assessing the financial stability of the franchise system.