How does Bft bill and recognize the technology fee?
Bft Franchise · 2025 FDDAnswer from 2025 FDD Document
bution.** Franchisor (and its affiliates) have established a creative brand development fund to promote the System, Marks and brand with which the Studio is associated generally (the "Fund"). Franchisee shall contribute to the Fund, as directed by Franchisor from time to time, two percent (2%) of the Gross Sales of its Studio (the "Fund Contribution"), commencing once the Studio starts generating revenue from its business operations of its Studio. The Fund Contribution will typically be paid in the same manner and at the same interval that the Royalty Fee is collected (based on the Gross Sales of the Studio over the immediately preceding reporting period). Franchisor has the right, at any time and on notice to Franchisee, to change the amount of the Fund Contribution in accordance with Section 9.1 below.
- 5.7 Technology Fee. Franchisor may charge Franchisee a recurring technology fee, the amount of which may change from time to time during the Term, in Franchisor's discretion, to pay for certain aspects of Franchisee's computer system and/or software used in the operation of the Studio ("Technology Fee"). Franchisor reserves the right to designate and/or change the amount, scope, interval, or manner of payment of the Technology Fee, including the party to whom payment is made, at any time upon providing reasonable written notice to Franchisee; provided, however , Franchisor will not increase the Technology Fee by more than 10% annually. The Technology Fee may be collected by Franchisor at the same time as the Royalty Fees due hereunder.
- 5.8 Music Licensing Fee. Franchisor may charge Franchisee its then-current music licensing fee (the "Music Licensing Fee") as consideration for costs incurred in connection with obtaining licensing rights to music and playlists Franchisee will use in connection with the provision of Approved Services at the Studio.
Source: Item 23 — RECEIPTS (FDD pages 79–265)
What This Means (2025 FDD)
According to Bft's 2025 Franchise Disclosure Document, Bft may charge franchisees a recurring technology fee, the amount of which can change during the term, to pay for aspects of the franchisee's computer system or software used in the studio's operation. Bft retains the right to modify the amount, scope, interval, or payment method of the Technology Fee, including who receives the payment, at any time with reasonable written notice to the franchisee. However, Bft will not increase the Technology Fee by more than 10% annually. The Technology Fee may be collected at the same time as the Royalty Fees.
Franchisees are required to pay marketing fees of 2% of their gross sales. The marketing fees are collected by Bft on a monthly basis and are to be used for advertising, marketing, market research, product development, public relations programs and materials deemed appropriate to benefit brands. Bft bills and recognizes marketing fund fees as revenue each month as gross sales occur. Marketing fund expenses are recorded as incurred, which may not occur in the same period as the recognition of franchise marketing fund revenue.
Costs of franchise revenue consists of commissions related to the signing of franchise agreements, travel and personnel expenses related to the on-site training provided to the franchisees, and expenses related to the purchase of the technology packages and the related monthly fees. Costs of franchise revenue excludes depreciation and amortization.