What promises are included in the Fast Fix Jewelry And Watch Repairs franchise agreements?
Fast_Fix_Jewelry_And_Watch_Repairs Franchise · 2025 FDDAnswer from 2025 FDD Document
The Company's franchise agreements include (a) the right to use symbolic intellectual property over the term of each franchise agreement, (b) pre-opening services, such as training, and (c) ongoing services, such as management of the advertising fund contributions, and development and delivery of training materials. These promises are highly dependent upon and interrelated with the franchise right granted in the franchise agreement, so they are not considered to be individually distinct and therefore are accounted for as a single performance obligation. The performance obligation under the franchise agreement is the promise to provide daily access to the symbolic intellectual property over the term of each franchise agreement, which is a series of distinct services that represents a single performance obligation. Although the franchisor's underlying activities associated with the symbolic intellectual property will vary both within a day and day-to-day, the symbolic intellectual property is accessed over time and the customer (the franchisee) simultaneously receives and consumes the benefit from the franchisor's performance of providing access to the symbolic intellectual property (including other related activities).
Royalty fee revenue represents amounts paid by the franchisees for use of the name "Fast-Fix Jewelry and Watch Repairs" and for other services to be provided by the Company in accordance with the franchise agreement. Royalties are paid by the franchisee based upon a set percentage (as defined in the franchise agreement) of the franchisee's annual revenues that are related entirely to the Company's performance obligation under the franchise agreement. These royalties are considered variable consideration but, because they relate to a license of intellectual property, they are not included in the transaction price. Instead, royalty revenue is recognized as franchised sales occur. The royalty fees are recognized at a point in time, typically monthly, based on reported store sales. Advertising contributions received from franchisees are recorded as a component of rebate revenue and are offset by an equal corresponding expense in the accompanying consolidated statements of operations.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 37)
What This Means (2025 FDD)
According to the 2025 Fast Fix Jewelry And Watch Repairs Franchise Disclosure Document, the franchise agreements include several promises to the franchisee. These include granting the right to use the company's symbolic intellectual property for the duration of the agreement. This means franchisees can operate under the Fast Fix Jewelry And Watch Repairs brand and utilize its trademarks and other proprietary assets.
Fast Fix Jewelry And Watch Repairs also commits to providing pre-opening services, such as training programs to equip franchisees with the knowledge and skills needed to start and run their business. Additionally, the company promises ongoing services to support franchisees after they launch. These services include managing advertising fund contributions, which suggests Fast Fix Jewelry And Watch Repairs handles the collection and allocation of advertising fees to promote the brand. They also develop and deliver ongoing training materials to keep franchisees updated on best practices and new techniques.
These promises are all tied to the central franchise right, which is providing daily access to the symbolic intellectual property. Fast Fix Jewelry And Watch Repairs considers all these services as a single performance obligation, meaning they are interconnected and delivered over the term of the franchise agreement. The royalty fees paid by franchisees are for the use of the Fast Fix Jewelry And Watch Repairs name and these other services, calculated as a percentage of the franchisee's annual revenues.