When does Crepe De Licious recognize the commission received from the third-party food distributor?
Crepe_De_Licious Franchise · 2025 FDDAnswer from 2025 FDD Document
- 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.
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 recognizes commission revenue from a third-party food distributor at a specific point in time. As an agent for the third-party distributor, Crepe De Licious's role is to secure food ingredients. In return for this service, Crepe De Licious receives a commission.
The FDD states that Crepe De Licious recognizes this commission when the product is delivered to the customer. This means that the revenue is officially recorded when the food ingredients are physically provided to the specified recipient.
For a prospective franchisee, this accounting practice has implications for understanding Crepe De Licious's revenue recognition policies. It clarifies when the franchisor recognizes income related to its role as an agent for the food distributor, which can be helpful in assessing the financial performance and stability of the company.