When are royalty revenues recognized as revenue by City Publications?
City_Publications Franchise · 2025 FDDAnswer from 2025 FDD Document
Revenues related to the license are continuing royalties of 6% of gross sales, subject to a minimum royalty as defined in the franchise agreement. Royalty revenues are compensation for the use of the license in the territory, over the term of the contract, and will be used in part to continue the development of the Company's brand, the franchise system and provide on-going support for the Company's franchisees. The royalties are billed monthly and are recognized as revenue when earned.
Source: Item 23 — RECEIPT (FDD pages 39–129)
What This Means (2025 FDD)
According to City Publications' 2025 Franchise Disclosure Document, royalty revenues, which are 6% of gross sales subject to a minimum, are recognized as revenue when earned. These royalties compensate for using City Publications' license within a specific territory over the contract term. City Publications uses these royalties to develop its brand and franchise system and to support its franchisees. The royalties are billed monthly.