What do Crave Cookies franchise agreements require franchisees to remit?
Crave_Cookies Franchise · 2025 FDDAnswer from 2025 FDD Document
As a franchisor, the Company's principal business is to sell franchises and continuing fees to provide managed assistance of those franchises. Franchise rights may be granted through a franchise agreement that sets out the terms of the arrangement with the franchisee. The franchise agreements require that the franchisee remit continuing royalty and marketing fees to the Company based on the monthly revenues of the franchisees. The franchise agreements also require certain, upfront franchise fees such as initial fees paid upon opening of a franchise. The Company recognizes revenue when performance obligations under the terms of contracts with its customers are satisfied, which occurs when pre-opening services are provided to a customer to enable them to direct the use and obtain the benefit of the franchise, with the remaining portion being recognized over the life of the contract.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 47)
What This Means (2025 FDD)
According to Crave Cookies's 2025 Franchise Disclosure Document, franchise agreements require franchisees to make several payments to the company. These include continuing royalty and marketing fees, which are based on a percentage of the franchisee's monthly revenues. Franchisees must also pay certain upfront franchise fees, such as initial fees, when opening their Crave Cookies location.
These fees are standard in the franchise industry. Royalties provide ongoing support and brand development, while marketing fees contribute to advertising and promotional activities. The initial franchise fee compensates Crave Cookies for granting the franchise rights and providing initial training and support.
Prospective franchisees should carefully consider these required payments and how they will impact their profitability. Understanding the specific percentages or amounts of these fees is crucial for developing accurate financial projections. It is also important to understand how the monthly revenues are calculated, as this will directly impact the royalty and marketing fees owed to Crave Cookies.