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What amount of revenue will Chipotle Inc record for year

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Question - Chipotle Inc. grants franchisees the right to operate a franchise using the company's name, menu, and operational procedures. On June 1, a franchisee enters into a 5-year contract with Chipotle and pays a $250,000 initial franchise fee. The franchisee also pays $60,000 for equipment for the restaurant with a delivery date scheduled in 10 days. Per the contract, the franchisee will also pay a royalty equal to 3% of the franchisee sales over the contract life. Chipotle expects monthly sales at the franchise to be $100,000 per month based on extensive historical data. What amount of revenue will Chipotle Inc. record for the year?

A) $50,667

B) $71,000

C) $106,000

D) $110,167

E) $131,000

Reference no: EM133073535

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