# ASC Topic 952: Franchisors Source: FASB Accounting Standards Codification, Basic View [Read online](https://asc.understandingaccounting.org/asc/952/) Study and research edition. Verify current requirements with the official source. Summaries, enrichment, and tags are machine-generated study aids. Paragraph html preserves source markup; snippet is abbreviated. Pending content is not necessarily effective. Tables and mathematical or amendment markup are retained as HTML where Markdown would lose structure. Source downloaded (UTC): 2026-09-10T02:20:27.287Z to 2026-09-10T02:20:55.063Z Record version: sha256:f6e950444f44b682713bd1b472097be58cf5872e5fc4cacca7f5d04574f70ab7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## Machine-generated topic summary ASC 952 supplies the incremental, industry-specific GAAP for franchisors — entities that grant franchise rights to franchisees — and must be applied on top of, not instead of, all other applicable GAAP (952-10-15-1 through 15-3). Because ASU 2014-09 moved franchise fee revenue recognition to ASC 606 and contract cost capitalization to ASC 340-40, what remains in Topic 952 is guidance on franchising costs (costs of continuing franchise fees and regular, recurring indirect general, selling and administrative costs are expensed as incurred — 952-10-25-1; 952-10-25-2), presentation (when practicable, segregate costs of franchisor-owned outlets from those of franchised outlets — 952-10-45-1), and disclosure (outlet activity when changes are significant, plus significant commitments and obligations under agreements not yet substantially performed — 952-10-50-1; 952-10-50-2). The key idea: franchisors recognize revenue and capitalize incremental contract acquisition costs under the general revenue model, while Topic 952 governs cost expensing, franchised-versus-company-owned cost presentation, and franchise-specific disclosures. Source downloaded (UTC): 2026-09-10T02:20:27.287Z to 2026-09-10T02:20:55.063Z Record version: sha256:51a5ca0ba1eb3b516b2b146d1b5fefc5e42acc774f7a9af1320d211973a3403c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 952-10: Franchisors — Overall ### Machine-generated study aids ```json { "summary": "ASC 952-10 provides incremental, industry-specific accounting and reporting guidance for franchisors — the parties that grant business rights (the franchise) to franchisees. After ASU 2014-09 removed the old franchise revenue recognition rules (now handled under ASC 606 and 340-40), what remains is chiefly guidance on franchising costs, presentation of franchisor-owned versus franchised outlet costs, and outlet/commitment disclosures. Franchisors must also apply all other applicable GAAP not contained in this Topic.", "key_points": [ "The Topic applies to all entities meeting the definition of franchisor and covers costs associated with franchising activities and transactions between franchisor and franchisee (952-10-15-2; 952-10-15-3).", "Entities in scope must also comply with applicable guidance outside this Topic; the franchisor guidance is only incremental (952-10-15-1).", "Costs relating to continuing franchise fees shall be expensed as incurred (952-10-25-1).", "Indirect costs of a regular and recurring nature incurred irrespective of sales level (general, selling, and administrative) shall be expensed as incurred; incremental costs of obtaining a contract with a customer follow Subtopic 340-40 (952-10-25-2).", "When practicable, costs related to franchisor-owned outlets shall be distinguished from costs related to franchised outlets, such as by segregating franchised-outlet costs (952-10-45-1).", "If there are significant changes in outlets during the period, disclose the number of franchises sold, franchises purchased, franchised outlets in operation, and franchisor-owned outlets in operation (952-10-50-1).", "Disclose the nature of all significant commitments and obligations from franchise agreements, including services the franchisor has agreed to provide under agreements not yet substantially performed (952-10-50-2)." ], "categories": [ "Industry-specific", "Disclosure", "Presentation", "Revenue" ], "audience_level": "intermediate", "student_note": "The classic trap is citing ASC 952 for franchise fee revenue recognition — ASU 2014-09 superseded that guidance, so initial and continuing franchise fee revenue is now recognized under ASC 606 and related contract costs under ASC 340-40, leaving 952-10 to govern cost expensing, outlet cost segregation, and disclosures.", "related_topics": [ "606", "340-40", "810-10", "205-20", "922-350", "952-810" ], "key_concepts": [ "franchisor", "franchisee", "continuing franchise fees", "franchising costs", "franchisor-owned outlets", "franchised outlets", "costs of obtaining a contract", "franchise agreement commitments" ] } ``` Source downloaded (UTC): 2026-09-10T02:20:27.287Z to 2026-09-10T02:20:27.287Z Record version: sha256:bd8303c6ec803a4de543de2c347fc17d57c181507e138b1f9dec512ca215a774 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 952-10-00: 00 Status [Read section](https://asc.understandingaccounting.org/asc/952/10/#00-status) SEC content: no ##### [952-10-00-1](https://asc.understandingaccounting.org/asc/952/10/#952-10-00-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:20:27.287Z to 2026-09-10T02:20:27.287Z Record version: sha256:07b4ee0a5067af585983ff889630f4a2b1c9cfdb25b66118f01c3f3e44e7f407 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following table identifies the changes made to this Subtopic.
ParagraphActionAccounting Standards UpdateDate
Area FranchiseSupersededAccounting Standards Update No. 2014-0905/28/2014
ContractAddedMaintenance Update 2017-09 (PDF)05/30/2017
CustomerAddedMaintenance Update 2017-09 (PDF)05/30/2017
Franchise AgreementSupersededAccounting Standards Update No. 2014-0905/28/2014
952-10-05-1AmendedMaintenance Update 2017-09 (PDF)05/30/2017
952-10-05-1AmendedAccounting Standards Update No. 2014-0905/28/2014
952-10-05-2AmendedAccounting Standards Update No. 2014-0905/28/2014
952-10-10-1AmendedMaintenance Update 2017-09 (PDF)05/30/2017
952-10-15-3AmendedAccounting Standards Update No. 2014-0905/28/2014
952-10-25-1AddedMaintenance Update 2017-09 (PDF)05/30/2017
952-10-25-2AddedMaintenance Update 2017-09 (PDF)05/30/2017
952-10-45-1AddedMaintenance Update 2017-09 (PDF)05/30/2017
952-10-50-1AddedAccounting Standards Update No. 2014-0905/28/2014
952-10-50-2AddedMaintenance Update 2017-09 (PDF)05/30/2017
952-10-60-3AddedAccounting Standards Update No. 2009-1712/23/2009
Source downloaded (UTC): 2026-09-10T02:20:29.176Z to 2026-09-10T02:20:29.176Z Record version: sha256:5fbb870351549946821ed552ea3219f0d7b31b6b7c929592a5c383c3f6504fff Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 952-10-05: 05 Overview and Background [Read section](https://asc.understandingaccounting.org/asc/952/10/#05-overview-and-background) SEC content: no ##### [952-10-05-1](https://asc.understandingaccounting.org/asc/952/10/#952-10-05-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:20:29.176Z to 2026-09-10T02:20:29.176Z Record version: sha256:b6029fcaaeeedf82a2888b3385e8e2153a20b42416ebbe79cef7e1a8d3ffaf85 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The Franchisors Topic provides incremental accounting and reporting standards for franchisors. ##### [952-10-05-2](https://asc.understandingaccounting.org/asc/952/10/#952-10-05-2) Pending content: no Source downloaded (UTC): 2026-09-10T02:20:29.176Z to 2026-09-10T02:20:29.176Z Record version: sha256:9eeca51a86a323bc5ed17d7d3114eb27c12f86aaf9f31ea335d13a924ac88182 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The Franchisors Topic includes the following Subtopics: 1. a Overall 2. b [Subparagraph superseded by Accounting Standards Update No. 2014-09](https://asc.understandingaccounting.org/updates/asu-2014-09/). 3. c [Subparagraph superseded by Maintenance Update No. 2017-09](https://asc.understandingaccounting.org/updates/maintenance-updates-2017/). 4. d [Subparagraph superseded by Accounting Standards Update No. 2014-09](https://asc.understandingaccounting.org/updates/asu-2014-09/). 5. e [Subparagraph superseded by Maintenance Update No. 2017-09](https://asc.understandingaccounting.org/updates/maintenance-updates-2017/). 6. f Consolidations. Source downloaded (UTC): 2026-09-10T02:20:32.705Z to 2026-09-10T02:20:32.705Z Record version: sha256:1e2302f206e147b49f22b2bd8c3c5c1b34a5eacbac14af12293152348d65a0a5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 952-10-10: 10 Objectives [Read section](https://asc.understandingaccounting.org/asc/952/10/#10-objectives) SEC content: no ##### [952-10-10-1](https://asc.understandingaccounting.org/asc/952/10/#952-10-10-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:20:32.705Z to 2026-09-10T02:20:32.705Z Record version: sha256:ac302c531e656c9bee9f1ff0a9f3b0efa85b78847d7e10bd0510b4032c4772fe Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The objective of this Topic is to provide incremental accounting and reporting standards for [franchisors](https://asc.understandingaccounting.org/glossary/f/#franchisor "The party who grants business rights (the franchise) to the party (the franchisee) who will operate the franchised business."). Source downloaded (UTC): 2026-09-10T02:20:36.377Z to 2026-09-10T02:20:36.377Z Record version: sha256:c9339b536536f67de533d7c23d21645890a4c2a3ce3d49a829c463d063658024 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 952-10-15: 15 Scope and Scope Exceptions [Read section](https://asc.understandingaccounting.org/asc/952/10/#15-scope-and-scope-exceptions) SEC content: no #### Overall Guidance ##### [952-10-15-1](https://asc.understandingaccounting.org/asc/952/10/#952-10-15-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:20:36.377Z to 2026-09-10T02:20:36.377Z Record version: sha256:466d607b84766638f06613aaa75813ed5d037b46d09988e46a820697e93f27d5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The Subtopics within the Franchisors Topic only provide incremental industry-specific guidance for the entities defined in this Scope Section, or as further defined in the Scope Sections of the individual Franchisors Subtopics. Entities within the scope of this Topic shall also comply with the applicable guidance not included in this Topic. #### Entities ##### [952-10-15-2](https://asc.understandingaccounting.org/asc/952/10/#952-10-15-2) Pending content: no Source downloaded (UTC): 2026-09-10T02:20:36.377Z to 2026-09-10T02:20:36.377Z Record version: sha256:530cdceb3d93f3e8a95e322fe3f2008ae3df943f5c25ab7a0161c43bac497c78 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The guidance in this Subtopic applies to all entities that meet the definition of [franchisor](https://asc.understandingaccounting.org/glossary/f/#franchisor "The party who grants business rights (the franchise) to the party (the franchisee) who will operate the franchised business."), that is, the party that grants business rights (the franchise) to the party (the [franchisee](https://asc.understandingaccounting.org/glossary/f/#franchisee "The party who has been granted business rights (the franchise) to operate the franchised business.")) that will operate the franchised business. #### Transactions ##### [952-10-15-3](https://asc.understandingaccounting.org/asc/952/10/#952-10-15-3) Pending content: no Source downloaded (UTC): 2026-09-10T02:20:36.377Z to 2026-09-10T02:20:36.377Z Record version: sha256:42a922e3d2015a5e7aa6848df185166c4ace54675f16ddcc5bf3ac00be7b9d63 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The guidance in this Topic applies to the following: 1. a [Subparagraph superseded by Accounting Standards Update No. 2014-09](https://asc.understandingaccounting.org/updates/asu-2014-09/). 2. b Costs associated with franchising activities 3. c Transactions between the franchisor and franchisee. Source downloaded (UTC): 2026-09-10T02:20:43.815Z to 2026-09-10T02:20:43.815Z Record version: sha256:f2d51a2cdb8df4941815031a5701258fbe0e1904e42d7db37b46f4cf7e6d6927 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 952-10-25: 25 Recognition [Read section](https://asc.understandingaccounting.org/asc/952/10/#25-recognition) SEC content: no #### Costs ##### [952-10-25-1](https://asc.understandingaccounting.org/asc/952/10/#952-10-25-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:20:43.815Z to 2026-09-10T02:20:43.815Z Record version: sha256:19ed8d89f60a3366acb844b922b7b71fcac9651b8c05debdc4559aef8e7ae9ea Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Costs relating to [continuing franchise fees](https://asc.understandingaccounting.org/glossary/c/#continuing-franchise-fees "Consideration for the continuing rights granted by the franchise agreement and for general or specific services during its life.") shall be expensed as incurred. ##### [952-10-25-2](https://asc.understandingaccounting.org/asc/952/10/#952-10-25-2) Pending content: no Source downloaded (UTC): 2026-09-10T02:20:43.815Z to 2026-09-10T02:20:43.815Z Record version: sha256:2c69763829aa269cdab7fa6a77a2661bf18748c5433711c26b20aff6bac39fed Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Indirect costs of a regular and recurring nature that are incurred irrespective of the level of sales, such as general, selling, and administrative costs, shall be expensed as incurred. For guidance on accounting for the incremental costs of obtaining a [contract](https://asc.understandingaccounting.org/glossary/c/#contract "An agreement between two or more parties that creates enforceable rights and obligations.") with a [customer](https://asc.understandingaccounting.org/glossary/c/#customer "A party that has contracted with an entity to obtain goods or services that are an output of the entity's ordinary activities in exchange for consideration."), see Subtopic 340-40. Source downloaded (UTC): 2026-09-10T02:20:47.158Z to 2026-09-10T02:20:47.158Z Record version: sha256:c2f8b7b4ef6957ad08a5f53fd02daeb9d3930d4249ccede6f343a6e725930ae4 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 952-10-45: 45 Other Presentation Matters [Read section](https://asc.understandingaccounting.org/asc/952/10/#45-other-presentation-matters) SEC content: no ##### [952-10-45-1](https://asc.understandingaccounting.org/asc/952/10/#952-10-45-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:20:47.158Z to 2026-09-10T02:20:47.158Z Record version: sha256:7e232538bb9cbdf0a1ddd4c1fc86ff451eac1cb01d5b5997b77adbdb3fd2756a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Costs related to [franchisor](https://asc.understandingaccounting.org/glossary/f/#franchisor "The party who grants business rights (the franchise) to the party (the franchisee) who will operate the franchised business.")\-owned outlets shall be distinguished from costs related to franchised outlets when practicable. That may be done by segregating costs related to franchised outlets. Source downloaded (UTC): 2026-09-10T02:20:49.327Z to 2026-09-10T02:20:49.327Z Record version: sha256:4093294ec38088025b316d8fc3d93d13ebfc73eb9287f605b20d94dfd4537835 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 952-10-50: 50 Disclosure [Read section](https://asc.understandingaccounting.org/asc/952/10/#50-disclosure) SEC content: no ##### [952-10-50-1](https://asc.understandingaccounting.org/asc/952/10/#952-10-50-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:20:49.327Z to 2026-09-10T02:20:49.327Z Record version: sha256:3a09dab52628f85783dffd2e72a4859740d60b472cc7755b1ad2613d03c28730 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If there are significant changes in [franchisor](https://asc.understandingaccounting.org/glossary/f/#franchisor "The party who grants business rights (the franchise) to the party (the franchisee) who will operate the franchised business.")\-owned outlets or franchised outlets during the period, the number of the following shall be disclosed: 1. a Franchises sold 2. b Franchises purchased during the period 3. c Franchised outlets in operation 4. d Franchisor-owned outlets in operation. ##### [952-10-50-2](https://asc.understandingaccounting.org/asc/952/10/#952-10-50-2) Pending content: no Source downloaded (UTC): 2026-09-10T02:20:49.327Z to 2026-09-10T02:20:49.327Z Record version: sha256:b511adb5f5d27e249c9c2d35c07043939274941f9866b91038be7051546caece Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The nature of all significant commitments and obligations resulting from franchise agreements, including a description of the services that the [franchisor](https://asc.understandingaccounting.org/glossary/f/#franchisor "The party who grants business rights (the franchise) to the party (the franchisee) who will operate the franchised business.") has agreed to provide for agreements that have not yet been substantially performed, shall be disclosed. Source downloaded (UTC): 2026-09-10T02:20:51.679Z to 2026-09-10T02:20:51.679Z Record version: sha256:793d4c58752611250c9432d3a0473e1e1bca6578c858c3ceedfdea0834aafd67 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 952-10-60: 60 Relationships [Read section](https://asc.understandingaccounting.org/asc/952/10/#60-relationships) SEC content: no #### Presentation of Financial Statements ##### [952-10-60-1](https://asc.understandingaccounting.org/asc/952/10/#952-10-60-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:20:51.679Z to 2026-09-10T02:20:51.679Z Record version: sha256:4aa8a94fef9dc43818ac2d86e2a6912ccb26817feb0764b1792f57bd039e24bd Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For illustrations of [franchisor](https://asc.understandingaccounting.org/glossary/f/#franchisor "The party who grants business rights (the franchise) to the party (the franchisee) who will operate the franchised business.") reporting of discontinued operations, see paragraphs [205-20-55-83 through 55-103](https://asc.understandingaccounting.org/asc/205/20/#205-20-55-83) . #### Entertainment—Cable Television ##### [952-10-60-2](https://asc.understandingaccounting.org/asc/952/10/#952-10-60-2) Pending content: no Source downloaded (UTC): 2026-09-10T02:20:51.679Z to 2026-09-10T02:20:51.679Z Record version: sha256:a29fe4ca4abff962aa9fe30b8538460c5e01dac670214bcc584b247a6630a387 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For guidance on accounting for franchise costs related to cable television entities, see paragraphs [922-350-25-3](https://asc.understandingaccounting.org/asc/350/922/#350-922-25-3); [922-350-35-4](https://asc.understandingaccounting.org/asc/350/922/#350-922-35-4); and [922-720-25-4](https://asc.understandingaccounting.org/asc/720/922/#720-922-25-4). #### Consolidation ##### [952-10-60-3](https://asc.understandingaccounting.org/asc/952/10/#952-10-60-3) Pending content: no Source downloaded (UTC): 2026-09-10T02:20:51.679Z to 2026-09-10T02:20:51.679Z Record version: sha256:9116b15a8fecc081732798a2b1127226cf764cc03f09268778946285d367a9f7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For guidance on consolidation requirements applicable to a franchisor related to an entity that is the franchisee, see Subtopic 810-10.