Did Crave Cookies receive any royalty or marketing payments in 2021?
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. There were no royalty or marketing payments in 2021.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 47)
What This Means (2025 FDD)
According to Crave Cookies's 2025 Franchise Disclosure Document, the company did not receive any royalty or marketing payments in 2021. The document specifies that Crave Cookies receives a monthly royalty fee equal to 6% and a monthly marketing fee equal to 2% of the franchisee's weekly gross sales, which are due the following Tuesday.
These royalty and marketing fees are considered variable consideration, and Crave Cookies recognizes revenue for these fees on a monthly basis based on sales reports submitted by their franchisees. However, the 2025 FDD explicitly states that no such payments were received during the 2021 fiscal year.
This information is crucial for prospective franchisees as it provides insight into the company's revenue streams and financial performance during its early stages. The absence of royalty and marketing payments in 2021 could be attributed to the company's recent formation in February 2021 and the time it took to establish franchise operations and generate revenue from these sources.