What accounting standard update does Dog Haus follow for revenue recognition from contracts with customers?

Based on the 2025 Franchise Disclosure Document, Dog Haus's financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (GAAP). The financial statements are presented on the accrual basis of accounting. This means that Dog Haus recognizes revenue when it is earned, regardless of when cash is received, and expenses when they are incurred, regardless of when cash is paid. This is a standard accounting practice that provides a more accurate picture of a company's financial performance over time.

For a prospective franchisee, this indicates that Dog Haus follows standard and transparent accounting practices. Understanding the basis of accounting is crucial for interpreting the financial statements provided in the FDD, as it dictates how revenues and expenses are recognized. This information is primarily relevant to understanding the financial statements of Dog Haus itself, rather than the financial management of an individual franchise.

The FDD also mentions that certain prior period amounts may have been reclassified to conform with the current period presentation, but these reclassifications had no impact on previously reported net income or total members' deficit. This suggests that Dog Haus may make adjustments to its financial reporting for consistency, but these adjustments do not change the overall financial results. Prospective franchisees should focus on understanding the implications of accrual accounting for their own franchise operations, as well as how Dog Haus's financial performance may impact the brand's overall stability and support.