When is revenue recognized by Crawlspace Medic?
Crawlspace_Medic Franchise · 2024 FDDAnswer from 2024 FDD Document
Revenue Recognition: The Company recognizes revenue when the risks and rewards of ownership have substantively transferred to customers. This condition is normally met when the franchise agreement has been signed or when the goods or services have been delivered.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 42)
What This Means (2024 FDD)
According to the 2024 Crawlspace Medic Franchise Disclosure Document, the company recognizes revenue when the risks and rewards of ownership have been substantially transferred to the customers. This typically occurs when the franchise agreement is signed or when the goods or services are delivered.
For a Crawlspace Medic franchisee, this means that revenue from franchise fees is likely recognized upon signing the franchise agreement. Revenue from services provided to customers, such as crawlspace inspections, repairs, or installations, is recognized when those services are completed and delivered to the customer.
This revenue recognition policy aligns with standard accounting practices, where revenue is recognized when it is earned and realized or realizable. Franchisees should ensure they understand how Crawlspace Medic's revenue recognition policy impacts their financial reporting and tax obligations.