When does Epcon Communities recognize royalty income from franchisee home sales?
Epcon_Communities Franchise · 2025 FDDAnswer from 2025 FDD Document
Revenue is recognized when a performance obligation has been satisfied by transferring control of promised products or services to customers in an amount that reflects the consideration the Company expects to receive in exchange for those products or services.
Source: Item 23 — RECEIPTS (FDD pages 86–280)
What This Means (2025 FDD)
The 2025 Epcon Communities Franchise Disclosure Document includes information about revenue recognition, but it does not specifically state when Epcon Communities recognizes royalty income from franchisee home sales. However, the FDD does state that revenue is recognized when a performance obligation has been satisfied.
Specifically, the FDD states that Epcon Communities Franchising, LLC (Franchising) franchises the right to develop, construct and market its single-story ranch-style unit design to developers throughout the continental United States.
To fully understand when Epcon Communities recognizes royalty income, a prospective franchisee should ask the franchisor for clarification on the specific performance obligations that trigger revenue recognition related to royalties from home sales. This will help in understanding the financial reporting practices of Epcon Communities.