What were the royalties received by Afuri Ramen Dumpling in 2021?
Afuri_Ramen_Dumpling Franchise · 2024 FDDAnswer from 2024 FDD Document
franchise fee to training revenue which is recognized upon the franchise opening for business.
The Company recognizes royalty and marketing fee revenues from operating franchised restaurants monthly.
The Company records deferred revenue when it has not yet fulfilled its performance obligation for training services and for initial franchise fees collected but recognized over the course of the agreement.
Advertising – The Company expenses advertising costs as they are incurred. Advertising expense totaled $12,130 and $15,183 at December 31, 2021 and 2020, respectively.
Federal income taxes – The accounting for federal income taxes requires an asset and liability approach. Deferred income tax assets and liabilities are provided to recognize the expected future tax consequences of temporary differences between the bases of assets and liabilities for book and tax purposes. The Company files a consolidated federal income tax return with its stockholder, Afuri USA In
Source: Item 23 — Receipts (FDD pages 50–189)
What This Means (2024 FDD)
According to Afuri Ramen Dumpling's 2024 Franchise Disclosure Document, the document does not explicitly state the total royalties received by Afuri Ramen Dumpling in 2021. However, it does provide some relevant financial details.
The notes to the financial statements indicate that the company recognizes royalty and marketing fee revenues from operating franchised restaurants monthly. This suggests that royalties are a regular and ongoing source of income for Afuri Ramen Dumpling.
The FDD mentions that franchise agreements typically require franchisees to pay monthly royalty fees based on revenue levels. While the exact royalty percentage or formula is not disclosed in this excerpt, it confirms that royalties are tied to the franchisee's revenue. To get a clear picture of the royalties received by Afuri Ramen Dumpling in 2021, a prospective franchisee should ask the franchisor directly for this information, as well as details on how royalties are calculated and what percentage of revenue they represent.