What costs are included in the 'Costs of franchise revenue' for Bft?
Bft Franchise · 2025 FDDAnswer from 2025 FDD Document
Costs of franchise 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.
Selling, general and administrative expenses – The Company's selling, general and administrative expenses primarily consist of bank fees, bad debt expense, gain/loss on disposal of assets and other charges.
Marketing fund expense – Marketing fund expenses are recognized as incurred.
Source: Item 23 — RECEIPTS (FDD pages 79–265)
What This Means (2025 FDD)
According to Bft's 2025 Franchise Disclosure Document, the costs of franchise revenue include several specific expense categories. These costs consist of commissions related to the signing of franchise agreements, which are paid out to brokers or sales personnel involved in securing new franchisees. Additionally, the costs encompass travel and personnel expenses associated with providing on-site training to franchisees, ensuring they are properly equipped to operate their Bft studios. Finally, the costs of franchise revenue also include expenses related to the purchase of technology packages and the related monthly fees, indicating ongoing technological support and resources provided to franchisees.
Notably, the costs of franchise revenue specifically exclude depreciation and amortization, which are accounted for separately. This provides a clearer picture of the direct expenses tied to establishing and supporting new Bft franchise locations.
For the year ended December 31, 2024, Bft reported $19,596 in costs of franchise revenue, compared to $221 for the period from March 6, 2023 (date of inception) to December 31, 2023. This increase reflects the growth and expansion of the Bft franchise system over time. Prospective franchisees should consider these costs as part of their overall financial planning, understanding that they represent essential investments in training, technology, and franchise development.