When does Pearce Bespoke recognize revenue from pre-opening assistance provided to a franchisee?
Pearce_Bespoke Franchise · 2025 FDDAnswer from 2025 FDD Document
Pre-opening services include training and general assistance. The Company has adopted the franchisor practical expedient Accounting Standards Update (ASU) 2021-02, Franchisors – Revenue from Contracts with Customers (Subtopic 952-606), which allows the Company to treat pre-opening services as distinct from one another. Training is provided to the franchisee at no additional cost unless additional training is required. Additional training fees are recognized when the service is provided. Pre-opening assistance is provided to the franchisee as needed, and recognized when the service is charged.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 39)
What This Means (2025 FDD)
According to Pearce Bespoke's 2025 Franchise Disclosure Document, the company recognizes revenue from pre-opening assistance when the service is charged. Pearce Bespoke has adopted the franchisor practical expedient Accounting Standards Update (ASU) 2021-02, which allows them to treat pre-opening services as distinct from one another.
Pre-opening services for Pearce Bespoke include training and general assistance. The training is provided to the franchisee at no additional cost unless additional training is required. If additional training is required, the fees are recognized when the service is provided.
This means that franchisees will only be charged for pre-opening assistance as it is needed and as Pearce Bespoke provides the service. This is a departure from the typical franchise model where pre-opening training and assistance are included in the initial franchise fee.