Does Beauty Bungalows provide inspection, testing, and other quality control programs for franchisees?
Beauty_Bungalows Franchise · 2025 FDDAnswer from 2025 FDD Document
In accordance with Topic 606, we account for the following pre-opening services as distinct from the franchise license:
- Assistance in the selection of a site.
- Assistance in obtaining facilities and preparing the facilities for their intended use, including related financing, architectural, and engineering services, and lease negotiation.
- Training of the franchisee's personnel or the franchisee.
- Preparation and distribution of manuals and similar material concerning operations, administration, and record-keeping.
- Bookkeeping, information technology, and advisory services, including setting up the franchisee's records and advising the franchisee about income, real estate, and their taxes or about regulations affecting the franchisee's business; and
- Inspection, testing, and other quality control programs.
The transaction price attributable to performance obligations is recognized as the performance obligations are satisfied. The portion of the franchise fee, if any, that is not attributable to a distinct performance obligation is amortized over the life of the related franchise agreement.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 47)
What This Means (2025 FDD)
According to Beauty Bungalows' 2025 Franchise Disclosure Document, Beauty Bungalows does provide inspection, testing, and other quality control programs as part of its pre-opening services to franchisees. These services are considered distinct from the franchise license itself.
Specifically, Beauty Bungalows includes these quality control programs as part of the services they offer to assist franchisees in preparing their facilities for operation. This means that as a new franchisee, you can expect Beauty Bungalows to provide support in ensuring that your location meets the brand's standards before opening to the public.
The FDD states that Beauty Bungalows recognizes revenue when promised goods or services are transferred to customers. The transaction price attributable to performance obligations is recognized as the performance obligations are satisfied. The portion of the franchise fee, if any, that is not attributable to a distinct performance obligation is amortized over the life of the related franchise agreement.