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AB Inc., franchisor, entered into franchise agreement with AD Inc., franchisee on July 1, 2010. The initial franchisee fees agreed upon is P850,000. of which
AB Inc., franchisor, entered into franchise agreement with AD Inc., franchisee on July 1, 2010. The initial franchisee fees agreed upon is P850,000. of which P150,000 is payable upon signing and the balance to be covered by a non-interest bearing note payable in four equal annual installments. It was agreed that the down payment is not refundable, notwithstanding lack of substantial performance of services by franchiser. Probability, of collection is unlikely. The following expenses were incurred: Initial services: Direct cost Indirect cost 64,000 Continuing services: Direct cost 23,900 Indirect cost 9,000
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