What is the benefit to the franchisee of the pre-opening activities that are not brand specific for a Bombs Away franchise?
Bombs_Away Franchise · 2024 FDDAnswer from 2024 FDD Document
The Company expects that certain pre-opening activities provided to the franchisee will not be brand specific and will provide the franchisee with relevant general business information that is separate and distinct from the operation of a company-branded franchise unit. The portion of pre-opening activities that will be provided that is not brand specific is expected to be distinct as it will provide a benefit to the franchisee and is expected not to be highly interrelated or interdependent to the access of the Company's intellectual property, and therefore will be accounted for as a separate distinct performance obligation.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 35)
What This Means (2024 FDD)
According to the 2024 Bombs Away Franchise Disclosure Document, certain pre-opening activities provided to the franchisee will not be brand specific. These activities will provide the franchisee with relevant general business information that is separate and distinct from the operation of a Bombs Away-branded franchise unit.
The FDD indicates that these non-brand-specific pre-opening activities are expected to be distinct because they will provide a benefit to the franchisee. This benefit is expected not to be highly interrelated or interdependent to the access of Bombs Away's intellectual property. Because of this, these activities will be accounted for as a separate distinct performance obligation.
In simpler terms, Bombs Away aims to equip its franchisees with general business knowledge that is useful regardless of the specific franchise they operate. This training is considered separate from the specific knowledge needed to run a Bombs Away franchise, and it is accounted for as a distinct service provided to the franchisee.