According to Punch King Fitness, when is revenue recognized?

According to Punch King Fitness's 2024 Franchise Disclosure Document, the company recognizes revenue from franchise fees when it provides the initial agreed-upon services and the franchisee has commenced operations. Additionally, Punch King Fitness recognizes revenue from franchise royalty fees during the term of the franchise agreement.

For a prospective franchisee, this means that Punch King Fitness recognizes the initial franchise fee as revenue once they have provided the services they agreed to provide when the franchise was established, and the franchisee has started operating their Punch King Fitness location. This is a standard accounting practice, as it aligns revenue recognition with the delivery of services.

Furthermore, Punch King Fitness recognizes royalty fees as revenue throughout the duration of the franchise agreement. This indicates that as the franchisee operates and pays royalties, Punch King Fitness accounts for these payments as revenue during the period they are received. This is also a common practice, reflecting the ongoing support and brand usage provided by the franchisor.