Over what period does Eos Worldwide recognize revenue from the initial franchise fee?

According to Eos Worldwide's 2025 Franchise Disclosure Document, the company defers revenue from new franchisee agreements and recognizes it monthly on a pro rata basis over the life of the agreement. This period is typically 45 months.

For a prospective franchisee, this accounting practice means that Eos Worldwide does not recognize the entire initial franchise fee as revenue immediately upon signing the agreement. Instead, they spread the recognition of this revenue over the 45-month term. This approach aligns with accounting standards that require revenue to be recognized when the service is provided or the obligation is fulfilled.

This revenue recognition method provides a more accurate reflection of when Eos Worldwide provides ongoing support and services to its franchisees. It also smooths out the company's revenue stream, as the initial franchise fee contributes incrementally to the monthly revenue over nearly four years. This deferred recognition is a common practice in franchising, as the initial fee often covers not just the initial rights but also ongoing training, support, and brand usage.