Quarterly report pursuant to Section 13 or 15(d)

Revenue from contracts with customers

v3.19.3
Revenue from contracts with customers
9 Months Ended
Sep. 30, 2019
Revenue from Contract with Customer [Abstract]  
Revenue from contracts with customers

Note 11 – Revenue from contracts with customers

The following table provides information about contract receivables and liabilities, which include deferred license revenue and deferred gift card and gift certificate revenue, from contracts with customers (in thousands):

 

 

 

 

 

 

 

 

 

    

September 30, 

    

December 31, 

 

 

2019

 

2018

Receivables (1)

 

$

125

 

$

174

Deferred license revenue (2)

 

 

1,142

 

 

1,179

Deferred gift card and gift certificate revenue (3)

 

$

137

 

$

491


(1)

Receivables are included in accounts receivable on the consolidated balance sheets.

(2)

Includes the current and long-term portion of deferred license revenue.

(3)

Deferred gift card and gift certificate revenue is included in deferred gift card revenue and other on the consolidated balance sheets.

The Company determined that the services it provides under its licensing agreements are primarily the rights to access and derive benefit from our symbolic intellectual property. As a result, the initial license fees and upfront fees are recognized on a straight-line basis over the term of the license agreement as a component of management, license and incentive fee revenue on the consolidated statements of operations and comprehensive income (loss). Sales-based royalties are recognized as licensee restaurant sales occur.

Significant changes in deferred license revenue for the nine months ended September 30, 2019 were as follows (in thousands):

 

 

 

 

 

Deferred license revenue, as of December 31, 2018

 

$

1,179

Additions to deferred license revenue

 

 

111

Revenue recognized during the period

 

 

(148)

Deferred license revenue, as of September 30, 2019

 

$

1,142

 

As of September 30, 2019, the estimated deferred license revenue to be recognized in the future related to performance obligations that are unsatisfied as of September 30, 2019 was as follows (in thousands):

 

 

 

 

 

2019, nine months remaining

    

$

48

2020

 

 

191

2021

 

 

191

2022

 

 

166

2023

 

 

135

Thereafter

 

 

411

Total future estimated deferred license revenue

 

$

1,142

 

Proceeds from the sale of gift cards and gift certificates are recorded as deferred revenue and recognized as revenue when redeemed by the holder. There are no expiration dates on the Company’s gift card and gift certificates and the Company does not charge any service fees that would result in a decrease to a customer’s available balance. Although the Company will continue to honor all gift card and gift certificates presented for payment, it may determine the likelihood of redemption to be remote for certain gift cards and gift certificates due to, among other things, long periods of inactivity. In these circumstances, to the extent the Company determines there is no requirement for remitting balances to government agencies under unclaimed property laws, outstanding gift card and gift certificate balances may then be recognized as breakage in the consolidated statements of operations and comprehensive income (loss) as a component of owned food, beverage and other net revenues.

Significant changes in deferred gift card and gift certificate revenue for the nine months ended September 30, 2019 were as follows (in thousands):

 

 

 

 

 

Deferred gift card and gift certificate revenue, as of December 31, 2018

 

$

491

Additions to deferred gift card and gift certificates revenue

 

 

353

Revenue recognized during the period related to redemptions

 

 

(707)

Deferred gift card and gift certificate revenue, as of September 30, 2019

 

$

137

 

The Company recognized revenue of $0.2 million and $0.1 million related to our contract liabilities, which include deferred license revenue and deferred gift card and gift certificate revenue, in the three months ended September 30, 2019 and 2018, respectively, and $0.9 million and $0.6 million in the nine months ended September 30, 2019 and 2018, respectively.