When is revenue from rebates recognized by Crepe De Licious?
Crepe_De_Licious Franchise · 2025 FDDAnswer from 2025 FDD Document
- 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. Revenue from these rebates is recognized at a point in time as the rebates are earned from the vendors based on purchases made by franchisees. The rebates are received from the vendors quarterly. The Company does not have any significant financing components in its contracts with customers as payment is received shortly after the rebate is earned.
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 revenue from rebates at a specific point in time. As an agent for franchisees, Crepe De Licious negotiates pricing with large vendors and approved suppliers for food supplies on a system-wide basis. In return for these price negotiation services, Crepe De Licious receives volume-based rebate revenue from these vendors. These rebates are directly linked to the quantity of materials and supplies franchisees purchase under the negotiated pricing agreements.
Crepe De Licious recognizes revenue from these rebates as they are earned from the vendors, which is based on the purchases made by franchisees. The rebates are received from the vendors on a quarterly basis. This means that the company accounts for the rebate revenue once the franchisees have made the purchases that qualify for the rebates, and the vendors acknowledge and provide the rebates to Crepe De Licious.
Furthermore, the document states that Crepe De Licious does not have any significant financing components in its contracts with customers because payment is received shortly after the rebate is earned. This indicates that the rebate revenue is recognized and received in a timely manner, without extended payment terms or financing arrangements.