Some of the initial franchise fee may be allocated to

Question

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Initial franchise fees may be structured in various ways, and some of the fee may be allocated to continuing franchise fees, interest revenue on future installments, or options to purchase the franchisee's business. Any of these allocations may reduce the amount of the initial franchise fee that is recognized as revenue. Thus, choice D is the best answer as all of the options listed may impact the recognition of the initial franchise fee.

Some of the Initial Franchise Fee May Be Allocated to