How does Kitchen Solvers recognize revenue from franchisees for continuing services?
Kitchen_Solvers Franchise · 2025 FDDAnswer from 2025 FDD Document
l accounts is recorded. If amounts become uncollectible, they are charged to operations when that determination is made.
Revenue and Revenue Recognition
The Company recognizes revenue from franchisees for continuing services as they are provided. The performance obligation consists of providing continuous access to the CRM advertising, email, and reporting system, as well as providing continuous access to all licenses and products of the Company, and is recognized monthly. Th
Source: Item 21 — Financial Statements (FDD pages 48–49)
What This Means (2025 FDD)
According to Kitchen Solvers's 2025 Franchise Disclosure Document, the company recognizes revenue from franchisees for continuing services as those services are provided. Kitchen Solvers's performance obligation involves granting franchisees continuous access to the company's CRM, advertising, email, and reporting systems, as well as ongoing access to all licenses and products. This revenue recognition occurs monthly.
The fees for these continuing services consist of a $264 monthly technology fee, along with monthly business development and royalty fees. The business development fee is 1% of the franchisee's gross monthly sales, while the royalty fee varies from 2.5% to 6.0% of gross sales, depending on the sales volume.
For a prospective Kitchen Solvers franchisee, this means that a portion of their monthly payments to Kitchen Solvers will be recognized as revenue by the company in the same month they are paid. The technology fee is a fixed amount, providing predictability, while the business development and royalty fees will fluctuate based on the franchisee's sales performance. This revenue recognition method aligns the franchisor's income with the franchisee's ongoing operations and sales.