How are ice cream mix revenues recognized by Moes Southwest Grill?
Moes_Southwest_Grill Franchise · 2025 FDDAnswer from 2025 FDD Document
Certain franchisees are required to purchase ice cream mix from a certain subsidiary's approved distributors, who in turn source the ice cream mix from that subsidiary's approved manufacturers. Ice cream mix revenues are recognized upon the sale of ice cream mix based upon the respective agreements with the manufacturers, distributors, and the franchisees.
Source: Item 23 — Receipts (FDD pages 92–334)
What This Means (2025 FDD)
According to the 2025 FDD, Moes Southwest Grill recognizes ice cream mix revenues upon the sale of the ice cream mix. This recognition is based on the agreements Moes Southwest Grill has with the manufacturers, distributors, and franchisees involved in the process.
For a Moes Southwest Grill franchisee, this means that the revenue from ice cream mix sales is recorded at the point when the mix is sold, following the terms established in the agreements with the manufacturers and distributors who supply the mix. This revenue recognition method is straightforward, as it ties directly to the sale of the product.
It is important to note that franchisees are required to purchase ice cream mix from approved distributors, who source it from approved manufacturers. This requirement ensures consistency and quality control within the Moes Southwest Grill system. The revenue recognition process is aligned with these established supply chain relationships, providing clarity on when and how these revenues are accounted for.