What are the two components of the fee for a Focus Cfo franchise or license?

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)