In the context of Crepe De Licious franchise rights, what is considered symbolic intellectual property?

According to the 2025 Crepe De Licious Franchise Disclosure Document, franchise rights are considered symbolic intellectual property. This classification is specifically relevant when dealing with sales and usage-based royalties. For revenue recognition purposes, Crepe De Licious recognizes revenue from these royalties at the later of two points: when the subsequent sale occurs or when the performance obligation to which the royalty relates is satisfied, either fully or partially.

This means that the value of the franchise rights, as symbolic intellectual property, is tied directly to the ongoing sales and usage within the franchised location. Crepe De Licious recognizes the royalties as they are earned, ensuring that revenue is aligned with the actual economic activity generated by the franchisee. This approach is standard in franchise agreements where royalties are a primary revenue stream for the franchisor.

For a prospective Crepe De Licious franchisee, understanding this definition is crucial because it clarifies how royalties are calculated and when they are due. Royalties are billed in the first week of each month, and franchisees have thirty days to make the payment. This arrangement ensures a consistent and predictable revenue stream for Crepe De Licious, while also providing franchisees with a clear payment schedule.