When is the fee due for the sale of a Focus Cfo franchise or license?
Focus_Cfo Franchise · 2025 FDDAnswer from 2025 FDD Document
The sale of a franchise is under a franchise agreement entered into between the Area President franchisee and the Company. The sale of a license is under a license agreement entered into between the CFO licensee and the Company. The fee under both of these agreements is due upon signing the agreement. The fee may be fully or partially refundable based on certain criteria set forth in the agreement. The fee in both agreements is comprised of two components: a training fee and an initial franchise/license fee. The initial term of both the franchise and license agreement is ten years. Franchisees and licensees have the option to renew their agreement at the end of the initial term based on meeting certain criteria as set forth in the agreement and executing the then-current franchise or license agreement. The Company has determined that there are two performance obligations in both the franchise and license agreement which are 1) providing the initial training program for new franchisees/licensees and 2) ongoing support of the FocusCFO System and FocusCFO Resources during the term of the agreement. The Company recognizes revenue from the sale of a franchise or license in two stages. The initial training program is made available to the franchisees/licensees within two days of executing their agreement; therefore, the training fee is recognized once the training program has been provided to the franchisee/licensee. Support for the FocusCFO System and FocusCFO Resources is provided throughout the ten-year agreement term, therefore, the initial franchise/license fee is recognized as revenue over the duration of the agreement.
Source: Item 23 — Receipts (FDD pages 37–126)
What This Means (2025 FDD)
According to the 2025 Focus Cfo Franchise Disclosure Document, the fee for the sale of a franchise or license is due upon signing the agreement. This fee may be fully or partially refundable based on specific criteria outlined in the agreement. The fee is composed of a training fee and an initial franchise/license fee.
Focus Cfo recognizes revenue from the sale of a franchise or license in two stages. The initial training program is available to franchisees/licensees within two days of executing their agreement, and the training fee is recognized once the training program has been provided. Support for the FocusCFO System and FocusCFO Resources is provided throughout the ten-year agreement term. Therefore, the initial franchise/license fee is recognized as revenue over the duration of the agreement.
For a prospective Focus Cfo franchisee, this means that the initial investment is required upfront when signing the agreement. However, the revenue recognition method indicates that Focus Cfo accounts for this fee over the term of the agreement, aligning revenue with the ongoing support and resources provided. The potential for a full or partial refund, based on criteria within the agreement, offers some financial protection to the franchisee under certain circumstances, such as an unsuccessful background check.
It is important for potential Focus Cfo franchisees to carefully review the franchise agreement to understand the specific conditions under which the franchise fee may be refundable. Additionally, understanding how Focus Cfo recognizes revenue can provide insight into the financial relationship and ongoing support provided by the franchisor.