How are royalties paid by Fast Fix Jewelry And Watch Repairs franchisees calculated?
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 fees are calculated as a percentage of the franchisee's annual revenues. These revenues are specifically related to the company's performance obligation under the franchise agreement. The franchise agreement covers the use of the "Fast-Fix Jewelry and Watch Repairs" name and other services provided by the company.
These royalties are considered variable consideration due to their dependence on the franchisee's sales. However, because they are tied to the license of intellectual property, they are not included in the initial transaction price. Instead, Fast Fix Jewelry And Watch Repairs recognizes royalty revenue as franchised sales occur.
In practice, Fast Fix Jewelry And Watch Repairs franchisees pay royalties monthly, based on their reported store sales. The specific percentage used to calculate the royalty is defined within the franchise agreement itself, so prospective franchisees should carefully review this document to understand the exact financial obligations.