What do the technology fees for Buff City Soap represent, and when are they recognized?

According to the 2025 FDD, Buff City Soap's technology fees are associated with the use of the company's intellectual property in the sale of Buff City Soap retail store branded products within specific territories. These fees are recognized as revenue when they are earned.

For a prospective franchisee, this means that a portion of the fees paid to Buff City Soap is allocated to the technology and intellectual property that enables them to operate their retail store. This includes the brand name, proprietary processes, and any software or systems used in the business. The recognition of these fees as revenue when earned suggests that Buff City Soap accounts for these fees as services or rights are actually utilized by the franchisee.

This revenue recognition policy is a standard accounting practice, ensuring that Buff City Soap only records revenue when it has fulfilled its obligation to provide access to its intellectual property and technology. Franchisees should ensure they understand how these fees are calculated and what specific technologies and intellectual property are covered under the franchise agreement.