How are restaurant sales recognized as revenue for Company-owned Monicals Pizza restaurants?
Monicals_Pizza Franchise · 2025 FDDAnswer from 2025 FDD Document
Restaurant Sales – Substantially all restaurant sales represent retail sales to the general public through Company-owned restaurants. Such amounts are recognized as revenue at the point of sale on the cash basis at the time of the underlying sale and are presented net of sales tax and other sales-related taxes.
Source: Item 23 — RECEIPTS (FDD pages 46–257)
What This Means (2025 FDD)
According to Monicals Pizza's 2025 Franchise Disclosure Document, restaurant sales from company-owned restaurants are recognized as revenue at the point of sale. This means that when a customer purchases food at a Monicals Pizza company-owned restaurant, the sale is recorded as revenue immediately.
Monicals Pizza uses the cash basis method for recognizing these sales. This means that revenue is recognized when cash is received from the customer. The reported revenue is net of sales tax and other sales-related taxes, indicating that these taxes are not included in the reported revenue figures for the company-owned restaurants.
This approach to revenue recognition is standard for retail sales and provides a clear and immediate picture of sales performance for Monicals Pizza's company-owned locations. Franchisees should understand that this revenue recognition method applies specifically to company-owned restaurants, and royalty fees from franchised locations are accounted for differently, based on a percentage of the franchisees' sales.