What was the total amount of royalty fees collected by Dermani Medspa?
Dermani_Medspa Franchise · 2025 FDDAnswer from 2025 FDD Document
The Company's revenue is based on the timing of satisfaction of performance obligations. The Company has applied the optional exemption under paragraph 606‐10‐50‐14A(a). The right to the dermani MEDSPA trademark is recognized over time as a 5% royalty fee is collected on total sales. The contract length is 10 years for the use of the trademark. Remaining terms range from 7‐10 years.
Source: Item 23 — RECEIPTS (FDD pages 66–311)
What This Means (2025 FDD)
Based on the 2025 Dermani Medspa Franchise Disclosure Document, the company recognizes revenue over time as a 5% royalty fee is collected on total sales. While the FDD mentions this royalty fee structure, it does not explicitly state the total amount of royalty fees collected by Dermani Medspa for any specific year.
Instead, the document focuses on how Dermani Medspa recognizes revenue from royalty fees. These fees are collected weekly, based on weekly sales, and are recognized each week as sales occur. Franchisees are required to pay these royalties by Wednesday of each week, covering sales from the prior week through Sunday. If a franchise closes before the end of its contract term, all royalty fees become due within 15 days.
For a prospective franchisee, this means that royalty payments are a consistent, ongoing obligation tied directly to sales performance. The 5% royalty rate is a critical factor in projecting profitability and managing cash flow. The weekly payment schedule requires careful financial management to ensure timely payments. Furthermore, the accelerated payment requirement upon closure underscores the importance of planning for potential business termination scenarios.
To determine the actual royalty fees paid to Dermani Medspa, a prospective franchisee should ask the franchisor directly for detailed financial statements showing the total royalty income received in recent years. This information is essential for conducting thorough due diligence and assessing the financial health of the franchise system.