Company: LRHC
Filing Date: 2025-04-15
Form Type: 10-K
Source: 0001213900-25-032211
Chunk: 1039

Company: La Rosa Holdings Corp.
Filing Date: 2025-04-15
Form: 10-K
Item: Item 2
Chunk 1039
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 provides these services itself and
controls the services of its agents necessary to legally transfer the real estate. Consequently, the Company is defined as the principal
in the transaction. The Company, as principal, satisfies its obligation upon the closing of a real estate transaction. The Company has
concluded that agents are not employees of the Company, rather deemed to be independent contractors. Upon satisfaction of its obligation,
the Company recognizes revenue in the gross amount of consideration it is entitled to receive. The transaction price is calculated by
applying the Company’s portion of the agreed-upon commission rate to the property’s selling price. The Company may provide
services to the buyer, seller, or both parties to a transaction. In instances in which the Company represents both the buyer and the seller
in a transaction, it recognizes the full commission on the transaction. Commissions revenue contains a single performance obligation that
is satisfied upon the closing of a real estate transaction, at which point the entire transaction price is earned. The Company’s
customers remit payment for the Company’s services to the title company or attorney closing the sale of property at the time of
closing. The Company is not entitled to any commission until the performance obligation is satisfied and is not owed any commission for
unsuccessful transactions, even if services have been provided. In addition to commission, revenue from real estate brokerage services
(residential) consists of annual and monthly dues charged to the agents for providing systems, accounting, marketing tools and compliance
services. The annual and monthly dues are recognized each month as services are provided.

Franchising Services

The Company’s franchise agreements
offer the following benefits to the franchisee: common use and promotion of La Rosa Realty trademark; distinctive sales and promotional
materials; access to technology and training; and recommended procedures for operation of La Rosa Realty franchises. The Company concluded
that these benefits are highly related and part of one performance obligation for each franchise agreement, a license of symbolic intellectual
property that is billed through a variety of fees including (i) initial franchise fees, (ii) annual dues and (iii) royalty fees. Initial
franchise fees consist of a fixed fee payable upon signing the franchise agreement. Annual dues are calculated at a fixed fee per agent
(prorated for any partial year) payable annually before the 10th day of January or within 10 days after each agent commences their association
with the franchise. Royalty fees are calculated as the greater of a (a) fixed percentage of gross commission income for the period which