When is training class revenue recognized by Dermani Medspa?

According to Dermani Medspa's 2025 Franchise Disclosure Document, training class revenue from the training academy, which provides continued medical spa training to the general public, is recognized when the training event occurs. Until the event takes place, any amounts collected are classified as "Unearned Revenue." This accounting practice adheres to the accrual basis, where revenue is recognized when earned rather than when cash is received.

For a prospective Dermani Medspa franchisee, this means that if they conduct training classes, they will not be able to recognize the revenue until the training session has been completed. The funds received before the training are considered a liability (Unearned Revenue) on the franchisee's balance sheet. This policy ensures that Dermani Medspa franchisees accurately reflect their financial performance, aligning revenue recognition with the actual delivery of training services.

This approach is fairly standard in the franchise industry, particularly for services rendered over time or at a specific event. By deferring revenue recognition until the service is provided, Dermani Medspa ensures compliance with accounting standards and provides a clear picture of its financial obligations and performance. Franchisees should be aware of this policy when forecasting their revenue and managing their financial statements.