What is the nature of Crepe De Licious' contracts with its restaurant customers?
Crepe_De_Licious Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
Source: Item 23 — RECEIPTS (FDD pages 57–233)
What This Means (2025 FDD)
According to Crepe De Licious's 2025 Franchise Disclosure Document, the contracts with restaurant customers are short-term. These contracts are considered complete once the ordered food is delivered to the customer.
Crepe De Licious recognizes revenue from these sales at the point of delivery, when the customer takes ownership of the food and beverages. The restaurant's primary revenue source is the sale of crepes and beverages to consumers, typically residents of the Miami, Florida area, where the example restaurant (Dolphin Mall) is located.
This arrangement is typical in the food service industry, where transactions are immediate and based on fulfilling individual orders rather than ongoing agreements. Crepe De Licious ensures revenue recognition aligns with standard accounting practices by confirming approval, identifying rights and payment terms, establishing commercial substance, and ensuring collectability for each transaction.