According to Crepe De Licious, when is revenue recognized on contracts?

ted. The Restaurant's major product lines are crepes and beverages. The Company's contracts with its customers are short-term in nature and end upon the delivery of the ordered food.

Performance Obligations

When determining whether the customer has obtained control of the goods or services, the Company considers all future performance obligations. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer. A contract's transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. All of the Company's contracts have a single performance obligation as the promise to transfer the individual goods or services is not separately identifiable from other promises in the contracts and, therefore, not distinct. Revenue on the Company's contracts is recognized when obligations under the terms of the contract are satisfied.

The following performance obligations have been identified for which revenue is recognized at the point services or products are provided to satisfy the respective performance obligations:

• Franchise Fees For performance obligations related to franchise fees from franchisees, the Company has elected to adopt Financial Accounting Standards Board Accounting Standards Update 2021-02 which allows them to recognize the initial franchise fees in the year the store opens. The sales are made to franchisees. The Company receives a contractually obligated fee from the franchisee based on the restaurant. Payment for the initial franchise fees are due at the time the agreement is signed. Revenue from franchise fees are recognized at a point in time.
• Commissions for Sale of Food Products As an agent for a third-party food distributor, the Company's performance obligation is to procure food ingredients for the third-party. As consideration for this service, the Company receives a commission from the third-party upon delivery of the product. This commission is recognized at a point in time when the product is delivered to the customer.
• Sales & Usage Based Royalties Franchise rights are considered symbolic intellectual property. For sales-based and usage-based services, a franchisor recognizes revenue at the later of: (1) when the subsequent sales occurs; or (2) on the satisfaction or partial satisfaction of the performance obligation to which the royalty relates. Sales-based and usage-based royalties are recognized as earned. Royalties are billed for in the first week of each month and the franchisees have thirty days to pay.

Performance Obligations (Continued)

• Rebates As agent for the franchisees, the Company's performance obligation is to negotiate pricing with large vendors and approved suppliers of food supplies on a system-wide basis for the franchisees. As consideration for the price negotiation services provided, the Company receives volume-based rebate revenue from these third-party vendors. These volume rebates are associated with the quantity of franchisee purchases of materials and supplies under the negotiated pricing levels.

Source: Item 23 — RECEIPTS (FDD pages 57–233)