How does Crepe De Licious determine if a customer has control of goods or services?
Crepe_De_Licious Franchise · 2025 FDDAnswer from 2025 FDD Document
is creperie franchise sales and the contracts are typically for a ten-year period.
Services Provided to Customers (Continued)
The Restaurant primarily earns its revenue through sales of crepes and beverages to consumers. The Restaurant accounts for its contracts when it has obtained the approval and commitment from both parties, the rights of the parties are identified, the payment terms are identified, the contract has commercial substance and the collectability of consideration is probable. The Restaurant's customer base is typically residents of the Miami, Florida area where the restaurant is located. 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.
Source: Item 23 — RECEIPTS (FDD pages 57–233)
What This Means (2025 FDD)
According to Crepe De Licious's 2025 Franchise Disclosure Document, the company considers all future performance obligations when determining whether a customer has obtained control of goods or services. A performance obligation is defined as a promise in a contract to transfer a distinct good or service to the customer. The transaction price within a contract is allocated to each distinct performance obligation and is recognized as revenue when the performance obligation is satisfied.
Crepe De Licious notes that all of its contracts have a single performance obligation because the promise to transfer individual goods or services is not separately identifiable from other promises within the contracts, and therefore not distinct. Revenue on Crepe De Licious's contracts is recognized when the obligations under the terms of the contract are satisfied.
For restaurant food and beverage sales, the FDD states that control transfers at a point in time, specifically upon delivery to the customer. At this point, the customer accepts ownership, and Crepe De Licious records the revenue for the product sales.