On Dec. 29, 2011, STARBACKS signed a franchising agreement for the operation of an outlet in Dagupan City by Sombrero Co. The franchising agreement required the franchisee, Sombrero Co., to make an initial payment of P200,000 upon signing of the contract and three payments each of P100,000 beginning one year from the agreement date and yearly thereafter. The franchisor agrees to prepare market studies, find a suitable location, train employees, and perform some other related services. The location, train employees, and perform some other related services. The initial payment is refundable until substantial performance is effected. In 2011, STARBACKS should report franchise fee revenue of