[Anonymous]

I am a little confused on Initial Franchise Fees. I know Continuing Franchise Fees for mgmt. training, legal etc are expense when incurred and recognized when earned. But the Initial Franchise Fee I am confused over. I think it says revenue recognized when substantially performed for the franchisor and it is an intangible for the franchisee and amortized over the expected life of benefit? Is this correct?

[super_cpa]

Initial franchise fee is considered revenue when there is substantial performance i.e. all services have been performed. Franchisee amortizes the franchise fee over the life of the franchise. So what you said about revenue recognition is correct.

- "Of all people, you know who I am… who the world needs me to be. I’m Wonder Woman."

[super_cpa]

Initial franchise fee is considered revenue when there is substantial performance i.e. all services have been performed. Franchisee amortizes the franchise fee over the life of the franchise. So what you said about revenue recognition is correct.

- "Of all people, you know who I am… who the world needs me to be. I’m Wonder Woman."

[Author]

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