When is royalty revenue recognized by Fast Fix Jewelry And Watch Repairs?
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 is a percentage of the franchisee's annual revenues.
Fast Fix Jewelry And Watch Repairs considers these royalties as variable consideration tied to a license of intellectual property, so they are not included in the initial transaction price. Instead, the revenue recognition happens as the franchisee makes sales.
Specifically, Fast Fix Jewelry And Watch Repairs recognizes royalty fees at a point in time, typically on a monthly basis. This recognition is based on the sales reported by each store. This means that the franchisor's revenue from royalties is directly linked to the sales performance of its franchisees, providing an ongoing income stream based on their success.