When does Golden Krust Caribbean Restaurant recognize restaurant sales revenue?

According to the 2024 Golden Krust Caribbean Restaurant Franchise Disclosure Document, restaurant sales from company-owned restaurants are recognized at the point in time when a customer exchanges cash or cash equivalents for food and beverage products. This means that Golden Krust Caribbean Restaurant records the revenue when the customer pays for their meal.

Golden Krust Caribbean Restaurant's policy also states that they do not have any significant financing components, as payment is received at the point of sale. Franchise fees are received when a franchise agreement is signed but are recognized over the term of the agreement. Royalty and advertising revenue is recognized as the underlying sales occur, with payment typically received within 30 days. Any royalty or advertising revenue not paid within 30 days is reserved against.

For a prospective franchisee, this means that while the revenue from company-owned restaurants is recognized immediately upon the sale, the revenue stream from franchise fees, royalties, and advertising fees will be recognized over time as per the franchise agreements. This is a common practice in the franchise industry, where initial fees are amortized over the life of the agreement, and ongoing royalties are recognized as they are earned.