How does All Team receive royalties?
All_Team Franchise · 2025 FDDAnswer from 2025 FDD Document
The Company maintains its books and prepares its financial statements on the accrual basis of accounting wherein revenue is recognized when earned and invoiced and expenses are recognized when incurred. Furthermore, initial franchise fee income is earned upon execution of the franchise agreement, which is nonrefundable. The Company receives royalties based upon a percentage of annual sales volume of its affiliates and franchisees. Additionally, funding and processing fees are based on a percentage of gross billings.
In 2019, the Company adopted ASC 606, Revenue from Contracts with Customers, which amended the existing accounting standards for revenue recognition. Consequently, the Company recognizes revenue when the services are provided, persuasive evidence of an arrangement exists, the price is fixed and collection is reasonably assured in accordance with ASC 606.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 33)
What This Means (2025 FDD)
According to All Team's 2025 Franchise Disclosure Document, the company generates revenue through several avenues related to its franchising operations. Specifically, All Team receives royalties that are based upon a percentage of the annual sales volume generated by its franchisees and affiliates.
In addition to royalties, All Team also collects funding and processing fees. These fees are calculated as a percentage of the gross billings of the franchisees. This indicates that All Team's financial success is directly linked to the sales and billing performance of its franchisees.
All Team recognizes revenue when services are provided, there is persuasive evidence of an arrangement, the price is fixed, and collection is reasonably assured, in accordance with ASC 606, Revenue from Contracts with Customers. Initial franchise fee income is earned upon execution of the franchise agreement and is nonrefundable.