What was the revenue recognized over time for Exit franchise sales and renewals in 2022?

According to Exit's 2025 Franchise Disclosure Document, the revenue recognized over time for franchise sales and renewals in 2022 was $431,299. This figure represents the amount of initial and renewal fees that Exit recognized as revenue during that year, spread out on a straight-line basis over the term of the franchise agreements. This revenue recognition method aligns with accounting standards (ASC 606), where revenue is recognized as the service is provided, rather than when the cash is received.

For a prospective Exit franchisee, this information provides insight into how Exit recognizes revenue from its franchise operations. It demonstrates that a portion of the initial franchise and renewal fees are recognized each year over the term of the agreement, which is typically five years for franchise rights. This accounting practice is common in the franchise industry, as it reflects the ongoing support and brand usage provided to franchisees.

It's important to note that this figure only represents the revenue recognized during 2022 and does not include the total amount of franchise fees collected during that year. The actual cash collected from initial and renewal fees could be higher, with the excess being recorded as deferred revenue to be recognized in future periods. Additionally, this figure does not include other sources of revenue for Exit, such as regional development rights, annual membership fees, or transaction fees.