How often are Bath Tune Up franchise royalty fees billed and due?
Bath_Tune_Up Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchise royalty income consists of sales-based variable fees paid by franchisees and are billed and due monthly. The sales-based royalty fee is considered variable consideration and will continue to be recognized as revenue as such sales are earned by the franchisees. Sales-based fees qualify under the royalty constraint exception, and do not require an estimate of future transaction price.
Source: Item 21 — FINANCIAL STATEMENTS (FDD pages 51–52)
What This Means (2025 FDD)
According to Bath Tune Up's 2025 Franchise Disclosure Document, franchise royalty income consists of sales-based variable fees paid by franchisees. These fees are billed and due on a monthly basis. Because the royalty fee is sales-based, it is considered variable consideration and will continue to be recognized as revenue as such sales are earned by the franchisees.
This means that a Bath Tune Up franchisee can expect to calculate and pay their royalty fees each month based on their sales for that period. The amount due will fluctuate depending on the franchisee's revenue.
This monthly billing and payment cycle is a fairly standard practice in the franchise industry, allowing franchisors to receive a consistent revenue stream tied directly to the performance of their franchisees. It also allows franchisees to manage their cash flow by paying royalties in smaller, more frequent installments rather than a large annual sum.