How does Crave Cookies recognize revenue from product or equipment sales?
Crave_Cookies Franchise · 2025 FDDAnswer from 2025 FDD Document
The Company also sells products and services to customers. Sales to customers typically include products or equipment. The Company's performance obligation under these sales is to deliver products or equipment to customers and revenue is recognized at that point. The timing and amount of revenue recognized related to these revenues was not impacted by the adoption of Topic 606.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 47)
What This Means (2025 FDD)
According to Crave Cookies' 2025 Franchise Disclosure Document, the company recognizes revenue from product and equipment sales when the goods are delivered to the customer. Crave Cookies' performance obligation is fulfilled once the products or equipment are in the customer's possession.
This means that if a franchisee purchases equipment or products from Crave Cookies, Crave Cookies recognizes the revenue from that sale at the time of delivery. This is a standard practice, as revenue recognition typically occurs when the service is performed or the goods are transferred.
For a prospective franchisee, this indicates that Crave Cookies accounts for product and equipment sales separately from franchise fees and royalties. The FDD also states that the adoption of Topic 606 did not impact the timing and amount of revenue recognized related to these revenues.