How does Eos Worldwide recognize revenue from monthly membership fees billed to franchisees?

According to the 2025 FDD, Eos Worldwide generates revenue by billing its franchisees for subscribed monthly membership fees. These fees are billed monthly upfront at the franchisee's subscription renewal date. Eos Worldwide recognizes the revenue on the renewal date. If any membership periods overlap the year-end, the revenue is reclassified as deferred revenue, which is typically recognized within one year.

This means that Eos Worldwide recognizes revenue from monthly membership fees at the time the franchisee's subscription is renewed each month. However, if the membership period extends beyond the end of the fiscal year, the portion of the revenue covering the subsequent year is deferred and recognized in the following year. This accounting practice ensures that revenue is recognized in the period it is earned, aligning with standard accounting principles.

For a prospective franchisee, this revenue recognition policy is important to understand because it affects how Eos Worldwide reports its financial performance. It also provides insight into how the company manages its revenue streams and ensures compliance with accounting standards. Franchisees should be aware that Eos Worldwide's revenue recognition practices are in accordance with Accounting Standards Codification (ASC) Topic 606, which governs revenue recognition from contracts with customers.