Under GAAP, the Franchisor Recognizes the Initial Franchise Fee as Revenue

question 1

Essay

Under GAAP, the franchisor recognizes the initial franchise fee as revenue when it has substantially performed all material services. What does substantial performance mean?

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Definitions:

Bruit

Abnormal sound or murmur heard while auscultating an organ, gland, or artery.

Thrill

Continuous palpable sensation like the purring of a cat.

Skin Turgor

The skin's elasticity or its ability to change shape and return to normal, often used to assess hydration or the health of the skin.

Grasp

The act of seizing, holding, or obtaining an object or concept with the hand, mind, or understanding.