How does Precision Door Service recognize incentives earned?
Precision_Door_Service Franchise · 2025 FDDAnswer from 2025 FDD Document
Revenues from product sales are recognized upon transfer of title, when delivered to the customer, when the work is performed, or orders are shipped. Incentives earned are recognized as services are performed.
Source: Item 21 — Financial Statements (FDD page 91)
What This Means (2025 FDD)
According to Precision Door Service's 2025 Franchise Disclosure Document, incentives earned are recognized as services are performed. This means that Precision Door Service accounts for incentives as revenue at the point when the related services that qualify for the incentive have been completed.
For a prospective franchisee, this indicates that any incentives Precision Door Service receives from third parties based on the franchisee's performance will be recognized by Precision Door Service when the franchisee completes the services that trigger the incentive. This revenue recognition method aligns the incentive income with the actual delivery of services.
This approach is a standard accounting practice, ensuring that revenue is recognized when it is earned and realized, providing a clear and consistent financial picture. Franchisees should understand that this revenue recognition policy affects how Precision Door Service reports its financial performance and may influence decisions related to pricing, promotions, and service offerings.