What amount of direct and incremental costs does Engel & Volkers expect to recognize in 2028?
Engel_Volkers Franchise · 2025 FDDAnswer from 2025 FDD Document
| 2025 | $ | 171,689 | |
|---|---|---|---|
| 2026 | 163,056 | ||
| 2027 | 144,703 | ||
| 2028 | 124,875 | ||
| 2029 | 107,054 | ||
| Thereafter | 262,771 | ||
| Total | $ | 974,148 |
The direct incremental costs, principally consisting of commissions, are included in "Prepaid commissions" in the accompanying
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 88)
What This Means (2025 FDD)
According to Engel & Volkers's 2025 Franchise Disclosure Document, the direct and incremental costs expected to be recognized in 2028 are $153,486. These costs are associated with franchise agreements as of December 31, 2024. The direct incremental costs primarily consist of commissions and are included in "Prepaid commissions" on the consolidated balance sheets.
This figure represents the portion of initial franchise fees that Engel & Volkers anticipates recognizing as revenue in 2028, as these fees are amortized over the life of the franchise agreement. For a prospective franchisee, this indicates the future revenue recognition schedule for Engel & Volkers based on existing franchise agreements. It does not directly impact the franchisee's costs or revenues but provides insight into the franchisor's financial planning and revenue projections.
It is important to note that this amount is based on agreements already in place as of December 31, 2024, and does not include projections for new franchise agreements signed after that date. Therefore, the actual amount recognized in 2028 could differ depending on Engel & Volkers's franchise sales performance in the intervening years. This information is part of the broader financial picture presented in Item 21 of the FDD, which provides audited financial statements for the franchisor.