Occasionally a Franchise Agreement Grants the Franchisee the Right to Make

Occasionally a franchise agreement grants the franchisee the right to make future bargain purchases of equipment or supplies.When recording the initial franchise fee, the franchisor should

A) increase revenue recognized from the initial franchise fee by the amount of the expected future purchases.
B) record a portion of the initial franchise fee as unearned revenue which will increase the selling price when the franchisee subsequently makes the bargain purchases.
C) defer recognition of any revenue from the initial franchise fee until the bargain purchases are made.
D) None of these answer choices are correct.