Are the continuing franchise fees for Bath Tune Up fixed or variable?
Bath_Tune_Up Franchise · 2025 FDDAnswer from 2025 FDD Document
Continuing franchise fees consist of fees paid by franchisees, as determined by the signed franchise agreement which are billed and due monthly. The performance obligations for these fees relate to monthly access to services related to technology and marketing. These fees are fixed in nature and do not have pre-determined escalation amounts. In accordance with ASC 606, these fees are recognized over time on a monthly basis as the franchise utilizes the right to access the aforementioned services.
Source: Item 21 — FINANCIAL STATEMENTS (FDD pages 51–52)
What This Means (2025 FDD)
According to Bath Tune Up's 2025 Franchise Disclosure Document, continuing franchise fees are generally fixed. These fees are determined by the signed franchise agreement and are billed and due monthly. These fees provide franchisees with monthly access to technology and marketing services.
Unlike the sales-based royalty fees, which are variable and fluctuate with a franchisee's sales, the continuing franchise fees for Bath Tune Up are fixed in nature. The FDD states that these fees do not have pre-determined escalation amounts, meaning they are not scheduled to increase automatically over time.
This fixed fee structure offers predictability for Bath Tune Up franchisees, allowing them to budget more effectively for ongoing operational costs. However, it also means that franchisees must pay the same amount regardless of their monthly revenue, which could impact profitability during slower periods.