What is the term length of the Fly To Fit franchise agreement that affects revenue recognition?

According to Fly To Fit's 2024 Franchise Disclosure Document, the remaining franchisee fee not allocated to pre-opening activities is recorded as Unearned Revenue and will be recognized over the term of the franchise agreement.

This means that Fly To Fit recognizes revenue from franchise fees over the duration of the franchise agreement. Instead of recognizing all the revenue upfront, a portion is recognized periodically throughout the term. This accounting practice aligns the revenue recognition with the ongoing rights and services provided to the franchisee.

For a prospective Fly To Fit franchisee, this indicates that the franchisor's financial health is tied to the long-term success of its franchisees. It also suggests that the franchisor has an incentive to support franchisees throughout the term of the agreement, as their revenue recognition depends on it. However, the specific term length of the franchise agreement is not disclosed in this section, so a prospective franchisee should review the franchise agreement itself or ask the franchisor directly about the term length to fully understand the revenue recognition schedule.