What monthly royalty fee does Crave Cookies receive from franchisees?
Crave_Cookies Franchise · 2025 FDDAnswer from 2025 FDD Document
Revenues from continuing fees, including royalties, marketing fees and upfront franchise fees. The Company receives a monthly royalty fee equal to 6% and monthly marketing fee equal to 2% of the franchisees weekly gross sales due the following Tuesday. These royalty payments are considered to be variable consideration; however, the Company relies on a narrow exception to the variable consideration criteria where there is a sales-based or usage-based royalty and marketing. Under this exception, the Company recognizes revenue for sales-based royalty and marketing revenue on a monthly basis based on sales reports by their franchisees.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 47)
What This Means (2025 FDD)
According to Crave Cookies's 2025 Franchise Disclosure Document, the company receives a monthly royalty fee from its franchisees. This royalty fee is equal to 6% of the franchisee's weekly gross sales. In addition to the royalty fee, Crave Cookies also collects a monthly marketing fee, which is 2% of the franchisee's weekly gross sales. Both the royalty and marketing fees are due the Tuesday following the week of sales.
These royalty and marketing payments are considered variable consideration, but Crave Cookies relies on an exception for sales-based royalties and marketing fees. This allows the company to recognize revenue for these fees on a monthly basis, based on the sales reports submitted by the franchisees. This means that the amount a franchisee pays in royalties each month will directly correlate with their sales performance.
For a prospective Crave Cookies franchisee, this means that 8% of their weekly gross sales (6% for royalties and 2% for marketing) will be remitted to the franchisor on a monthly basis. It is important for potential franchisees to factor these ongoing fees into their financial projections and business plans, as they will significantly impact the profitability of the franchise. Franchisees should also be aware that these fees are based on gross sales, not net profit, so they must be managed effectively to ensure the financial health of their Crave Cookies location.