Revenue Recognition

3 Months Ended

Nov. 28, 2020

Revenue From Contract With Customer [Abstract]

Revenue Recognition

3. Revenue Recognition

The following table presents the Company’s revenues for the thirteen weeks ended November 28, 2020 and November 30, 2019, respectively, disaggregated by service type:

	Thirteen Weeks Ended
	November 28, 2020					November 30, 2019
(In thousands, except percentages)	Revenues		% of Revenues			Revenues		% of Revenues
Core Laundry Operations	$	393,190		88.0	%	$	416,298		89.4	%
Specialty Garments		38,134		8.5	%		33,402		7.2	%
First Aid		15,529		3.5	%		15,698		3.4	%
Total Revenues	$	446,853		100.0	%	$	465,398		100.0	%

See Note 16 “Segment Reporting” for additional details of segment definitions.

Revenue Recognition Policy

During the thirteen weeks ended November 28, 2020 and November 30, 2019, approximately 91.0% and 91.6%, respectively, of the Company’s revenues were derived from fees for route servicing of Core Laundry Operations, Specialty Garments, and First Aid customers performed by the Company’s employees at the customer’s location of business. Revenues from the Company’s route servicing customer contracts represent a single performance obligation. The Company recognizes these revenues over time as services are performed based on the nature of services provided and contractual rates (input method). Certain of the Company’s customer contracts, primarily within the Company’s Core Laundry Operations, include pricing terms and conditions that include components of variable consideration. The variable consideration is typically in the form of consideration due to customer-based performance metrics specified within the contract. Specifically, some contracts contain discounts or rebates that the customer can earn through the achievement of specified volume levels. Each component of variable consideration is earned based on the Company’s actual performance during the measurement period specified within the contract. To determine the transaction price, the Company estimates the variable consideration using the most likely amount method, based on the specific contract provisions and known performance results during the relevant measurement period. When determining if variable consideration should be constrained, the Company considers whether factors outside its control could result in a significant reversal of revenue. In making these assessments, the Company considers the likelihood and magnitude of a potential reversal. The Company’s performance period generally corresponds with the monthly invoice period. No significant constraints on the Company’s revenue recognition were applied during the thirteen weeks ended November 28, 2020 or November 30, 2019. The Company reassesses these estimates during each reporting period. The Company maintains a liability for these discounts and rebates within accrued liabilities on the consolidated balance sheets. Variable consideration also includes consideration paid to a customer at the beginning of a contract. The Company capitalizes this consideration and amortizes it over the life of the contract as a reduction to revenue in accordance with the updated accounting guidance for revenue recognition. These assets are included in other assets on the consolidated balance sheets.

Costs to Obtain a Contract

The Company defers commission expenses paid to its employee-partners when the commissions are deemed to be incremental for obtaining the route servicing customer contract. The deferred commissions are amortized on a straight-line basis over the expected period of benefit. The Company reviews the deferred commission balances for impairment on an ongoing basis. Deferred commissions are classified as current or noncurrent based on the timing of when the Company expects to recognize the expense. The current portion is included in prepaid expenses and other current assets and the non-current portion is included in other assets on the Company’s consolidated balance sheets. As of November 28, 2020, the current and non-current assets related to deferred commissions totaled $13.3 million and $57.3 million, respectively. As of August 29, 2020, the current and non-current assets related to deferred commissions totaled $13.3 million and $55.6 million, respectively. During the thirteen weeks ended November 28, 2020 and November 30, 2019, the Company recorded $3.5 million and $3.5 million, respectively, of amortization expense related to deferred commissions.