When does Hydrodog recognize royalties and technology fees as revenue?
Hydrodog Franchise · 2025 FDDAnswer from 2025 FDD Document
Royalties and technology fees are earned on sales by franchisees and are recognized as revenue in the month the underlying sales occur throughout the term of the respective franchise agreement. These fees are calculated as a percentage of sales (or monthly minimum amounts) by franchisees and are paid on a monthly basis.
Source: Item 23 — RECEIPTS (FDD pages 43–166)
What This Means (2025 FDD)
According to Hydrodog's 2025 Franchise Disclosure Document, royalties and technology fees are recognized as revenue in the month when the underlying sales by franchisees occur. These fees are earned on franchisee sales throughout the term of the franchise agreement.
The royalty fee is a percentage of gross sales or a minimum monthly amount, while the technology fee is a set monthly charge, plus an additional monthly fee for each Hydrodog vehicle. Both royalties and technology fees are paid on a monthly basis.
This means that Hydrodog recognizes revenue from these fees as franchisees make sales, providing a consistent revenue stream for the company. For a prospective franchisee, this highlights the ongoing costs associated with operating a Hydrodog franchise, as these fees are continuously collected based on sales and technology usage.