How does Craters & Freighters recognize franchise revenues related to technology and insurance programs?

According to Craters & Freighters' 2025 Franchise Disclosure Document, franchise revenues from technology and insurance programs are recognized over time. Specifically, Craters & Freighters recognizes these revenues on a monthly basis as franchisees utilize the features of these programs. These revenues are categorized within "franchise revenues" in the company's financial statements. The expenses associated with providing these technology and insurance services are included within "technology support" and "insurance program" line items.

For a prospective Craters & Freighters franchisee, this means that the contributions they make to the technology and insurance programs are recognized as revenue by the franchisor gradually over the period they are using the services. This accounting practice provides a consistent and predictable revenue stream for Craters & Freighters related to these ongoing services.

It is important to note that this revenue recognition method aligns with accrual accounting principles, where revenue is recognized when earned rather than when cash is received. This approach provides a more accurate representation of the financial performance of Craters & Freighters related to its technology and insurance offerings.