What are the revenue streams for Angry Chickz?
Angry_Chickz Franchise · 2025 FDDAnswer from 2025 FDD Document
Royalty revenue – Royalty revenues represent royalties earned from each of the franchisees in accordance with the franchise disclosure document and the franchise agreement for use of the Angry Chickz name, menus, processes, and procedures. The royalty rate in the franchise agreement is up to seven percent of the gross sales of each restaurant operated by each franchisee. Royalty fee revenue from franchised restaurants is recognized in the period earned and is payable to the Company weekly or monthly when the sales are reported by the franchisees.
Brand fund revenue – Brand fund revenues represent payments made by the franchisee to the Company for the brand development fund (Brand Fund) in accordance with the franchise disclosure document, and the franchise agreement. The Brand Fund fee rate is up to 2% of the gross sales of each restaurant operated by each franchisee. Brand Fund revenue is recognized weekly or monthly, while expenditures will be included in advertising expenses. Expenditures of the Brand Fund will primarily be amounts paid to third parties but may also include personnel expenses and allocated costs from the Member.
Franchise fee revenue – The franchise arrangement between the Company and each franchise owner of an Angry Chickz restaurant is documented in the form of a franchise agreement and, in certain cases, an area development agreement. The franchise arrangement requires the Company as franchisor to perform various activities to support the Angry Chickz brand and does not involve the direct transfer of goods and services to the franchise owner as a customer. Activities performed by the Company are highly interrelated with the franchise license and AC IP and are considered to represent a single performance obligation, which is the transfer of the franchise license and intellectual property. The nature of the Company's promise in granting the franchise arrangement is to provide the franchise owner with access to the brand's intellectual property over the term of the franchise agreement.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 54)
What This Means (2025 FDD)
According to the 2025 Angry Chickz Franchise Disclosure Document, the company has three main revenue streams. These include royalty revenue, brand fund revenue, and franchise fee revenue.
Royalty revenue is generated from royalties paid by franchisees for the use of the Angry Chickz name, menus, processes, and procedures. The royalty rate is up to 7% of the gross sales of each restaurant operated by the franchisee. These royalties are typically paid weekly or monthly.
Brand fund revenue comes from payments made by franchisees to the company for the brand development fund. This fee is up to 2% of the gross sales of each restaurant and is also recognized weekly or monthly. These funds are used for advertising expenses, which may include payments to third parties, personnel expenses, and allocated costs from the Member. Franchise fee revenue is derived from the initial franchise fee of $50,000 that franchisees pay for each location they open.