How does Fast Fix Jewelry And Watch Repairs recognize royalty revenue?
Fast_Fix_Jewelry_And_Watch_Repairs Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 37)
What This Means (2025 FDD)
According to Fast Fix Jewelry And Watch Repairs's 2025 Franchise Disclosure Document, royalty fee revenue is recognized as franchised sales occur. These royalties are payments from franchisees for using the "Fast-Fix Jewelry and Watch Repairs" name and other services provided as part of the franchise agreement. The royalty fees are based on a percentage of the franchisee's annual revenues, as defined in the franchise agreement, and are directly tied to the company's performance obligation under the agreement.
The FDD states that these royalties are considered variable consideration because they relate to a license of intellectual property, they are not included in the transaction price. Instead, Fast Fix Jewelry And Watch Repairs recognizes royalty revenue as franchised sales occur.
Practically, this means that Fast Fix Jewelry And Watch Repairs recognizes royalty fees at a specific point in time, typically monthly, based on the sales reported by each store. This approach aligns the revenue recognition with the actual sales performance of the franchisee, providing a consistent and predictable method for accounting for royalty income.