What was the amount of initial franchise fee revenue recognized by Kitchen Solvers in 2023?
Kitchen_Solvers Franchise · 2025 FDDAnswer from 2025 FDD Document
and materials. Accordingly, the revenue for these fees is recognized monthly.
The following table provides information about revenue recognized from contracts with customers
Source: Item 21 — Financial Statements (FDD pages 48–49)
What This Means (2025 FDD)
According to Kitchen Solvers' 2025 Franchise Disclosure Document, the initial franchise fee revenue recognized in 2023 was $232,748. This figure represents the portion of initial franchise fees that Kitchen Solvers recognized as revenue during that year.
Kitchen Solvers collects a nonrefundable initial franchise fee from each new franchisee. However, instead of recognizing the entire fee as revenue immediately, Kitchen Solvers recognizes the revenue over the life of the franchise agreement, which is generally 10 years. This accounting practice is common in the franchise industry, as it aligns the revenue recognition with the ongoing services and support provided to the franchisee over the term of the agreement.
For a prospective Kitchen Solvers franchisee, this means that the initial franchise fee you pay will not be fully recognized as revenue by Kitchen Solvers until the end of your 10-year franchise term. The initial franchise fee is reflected in the financial statements as franchise sales. The royalty, technology fee, and brand fund fee are included with Other franchise sales and rebills in the financial statements.