Revenue Recognition for Franchisors: What Every Franchise Attorney Should Know


CLE credits earned: 2 GENERAL (or 2 LAW & LEGAL for WA state)

The session will help franchise attorneys understand the new GAAP model for revenue recognition, ASC Topic 606, Revenue from Contracts with Customers. The standard was required to be adopted by public franchisers in 2018 and is effective for nonpublic franchisors in 2019. Franchise attorneys will learn the core principles of the 5 step process and the key judgements to be applied in each step of the new revenue recognition model.

This course is co-sponsored by the Federal Bar Association.

Key topics to be discussed:

•   The 5 Step model & key judgements in each step
•   Other considerations such as accounting for commissions, presentation of advertising funds, and methods of transition to the new standard
•   Highlight significant differences from the prior revenue recognition model
•   Recent developments and guidance provided by the FASB

Date / Time: May 24, 2019

•   10:00 am – 12:00 pm Eastern
•   9:00 am – 11:00 am Central
•   8:00 am – 10:00 am Mountain
•   7:00 am – 9:00 am Pacific

Choose a format:

•   Live Video Broadcast/Re-Broadcast: Watch Program “live” in real-time, must sign-in and watch program on date and time set above. May ask questions during presentation via chat box. Qualifies for “live” CLE credit.
•   On-Demand Video: Access CLE 24/7 via on-demand library and watch program anytime. Qualifies for self-study CLE credit. On-demand versions are made available 7 business days after the original recording date and are view-able for up to one year.

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Select your state to see if this class is approved for CLE credit.

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Original Broadcast Date: May 24, 2019

Lee Plave, Esq. is a co-founding partner of Plave Koch PLC, an entrepreneurial law firm in Reston, Virginia. He counsels franchisors and distributors, drafts and negotiates agreements for international and domestic transactions, and advises clients on all aspects of franchise and distribution law.

Lee also works with clients on private equity transactions, the application of emerging technologies to franchise and distribution systems (including data use and security policies, social media and networking issues, e-commerce, cybersquatting and domain name disputes, consumer complaint and cybersmear sites) and software and hardware licensing. He also represents clients before the Federal Trade Commission, where he began his career.

Lee is serves on the Board of Trustees of Clark University (thru 2022). He previously served as the Director of the International Division of the American Bar Association’s Forum on Franchising (2012 to 2014), and currently serves as an officer of the International Bar Association Committee on International Franchising.

London-based Who’s Who Legal recognized Lee as the global Franchise Lawyer of the Year in 2018 and 2019, as ranked by his peers. London-based Chambers & Partners, which publishes an internationally-respected client guide, ranks Lee as one of the leading franchise lawyers in the United States and the world. The International Franchise Association Educational Foundation recognized Lee as a “Certified Franchise Executive.”

Christa LaBrosse is a partner with Plante Moran’s professional standards team. As a member of the professional standards team, Christa’s highest priority is the delivery of quality audit, review, and other accounting and financial reporting-related services.

Christa oversees the firm’s implementation efforts of new accounting pronouncements. Most of her recent attention has been focused on the upcoming revenue recognition standard as a leader of the firm’s Revenue Recognition Task Force.

Christa assists staff, partners, and clients primarily in the franchise, business and professional services, and consumer goods and services industries in addressing challenging accounting and auditing issues. Christa’s areas of expertise include revenue recognition, stock options and equity, and SOC examinations.

Christa is a member of the AICPA and received her B.S. in accounting from Wayne State University.

Accreditation Policy
myLawCLE seeks accreditation for all programs in all states. (Accreditation for paralegals sought thru NALA and NFPA paralegal associations.) Each attending attorney/paralegal will receive a certificate of completion following the close of the CLE program as proof of attendance. In required states, myLawCLE records attorney/paralegals attendance, in all other states attorney/paralegal is provided with the approved CLE certificate to submit to their state bar or governing association.

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Section I. The evolution of the new standard and franchise specific guidance provided by the FASB

Section II. Impact on franchisors
a) Key judgements relating to initial franchise fees and royalties
        i. Step 1 – Identify the contract
        ii. Step 2 – Identify the separate performance obligations
        iii. Step 3 – Determine the transaction price
        iv. Step 4 – Allocate the transaction price
        v. Step 5 – Recognize revenue upon satisfaction of each performance obligation
b) Commissions
c) Presentation of advertising funds
d) Application of the model to example franchisor
e) Methods of transition to the new standard

Section III. Business considerations
a) Valuation
b) Debt covenants
c) Regulatory