What is Crave Cookies' principal business as a franchisor?
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.
The Company also sells products and services to customers. Sales to customers typically include products or equipment. The Company's performance obligation under these sales is to deliver products or equipment to customers and revenue is recognized at that point.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 47)
What This Means (2025 FDD)
According to Crave Cookies' 2025 Franchise Disclosure Document, the company's principal business as a franchisor is to sell franchises and collect continuing fees in exchange for providing managed assistance to those franchises. Crave Cookies grants franchise rights through a franchise agreement, which outlines the terms of the arrangement with the franchisee.
As part of this agreement, franchisees are required to remit continuing royalty and marketing fees to Crave Cookies. These fees are based on a percentage of the franchisee's monthly revenues. In addition to ongoing fees, the franchise agreements also stipulate certain upfront franchise fees, such as initial fees that are paid upon the opening of a franchise location.
Crave Cookies recognizes revenue when it has fulfilled its obligations under the terms of its contracts with franchisees. This typically occurs when pre-opening services are provided to enable the franchisee to operate and benefit from the franchise. The remaining portion of the revenue is recognized over the life of the contract. Crave Cookies also generates revenue from product and service sales to customers, such as the sale of products or equipment, with revenue recognized upon delivery.