When is the entire franchise fee typically paid to Crave Cookies?

According to Crave Cookies' 2025 Franchise Disclosure Document, the company generally requires that the entire franchise fee be paid upon the execution of the franchise agreement. However, Crave Cookies recognizes this revenue as 'deferred revenue' until certain revenue recognition criteria have been met. This means that while Crave Cookies receives the full franchise fee upfront, they do not immediately recognize it as earned revenue on their financial statements.

Instead, Crave Cookies recognizes a portion of the franchise fee as revenue when they have performed substantially all the services for the franchise, as stipulated in the franchise agreement. This typically occurs upon completion of new franchise training and the start of the franchisee's business operations. The remaining portion of the franchise fee is then recognized as revenue over the expected life of the franchise agreement.

For a prospective Crave Cookies franchisee, this means that the entire franchise fee is due when signing the franchise agreement. While the franchisor receives the full payment upfront, the franchisee should understand that Crave Cookies recognizes the revenue over time as they fulfill their obligations under the agreement. This revenue recognition method aligns with accounting standards and ensures that revenue is recognized when it is earned, rather than simply when cash is received.