What are the primary sources of revenue for Kitchen Solvers as a franchisor?
Kitchen_Solvers Franchise · 2025 FDDAnswer from 2025 FDD Document
and materials. Accordingly, the revenue for these fees is recognized monthly.
The following table provides information about revenue recognized from contracts with customers for the year ended December 31:
| 2024 | 2023 | 2022 | |
|---|---|---|---|
| Initial franchise fee | $ 259,581 | $ 232,748 | $ 193,048 |
| Supplies package | 37,350 | 70,512 | 75,559 |
| Royalty fee | 984,777 | 888,476 | 807,670 |
Source: Item 21 — Financial Statements (FDD pages 48–49)
What This Means (2025 FDD)
According to Kitchen Solvers' 2025 Franchise Disclosure Document, the company's revenue is derived from several sources related to its franchise operations. These include initial franchise fees, supplies packages, royalty fees, technology fees, and brand fund fees. Additionally, Kitchen Solvers generates revenue from product sales, specifically cabinets, which they began manufacturing and selling to franchisees in 2023. These multiple revenue streams are typical in the franchise industry, allowing the franchisor to profit from initial setup, ongoing support, and product distribution.
The initial franchise fee is a nonrefundable fee paid by each new franchisee, recognized over the typical 10-year life of the franchise agreement. Franchisees are also required to purchase a supplies package from Kitchen Solvers, with revenue recognized when the package is provided. A monthly technology fee of $264 provides franchisees with access to Kitchen Solvers' CRM, advertising, email, and reporting systems. In addition to the technology fee, Kitchen Solvers also collects a monthly business development fee, which is 1% of the franchisee's gross monthly sales, and a royalty fee ranging from 2.5% to 6.0% of gross sales, depending on the sales volume.
The financial performance of Kitchen Solvers is reflected in the revenue recognized from contracts with customers. In 2024, the total revenue recognized from these contracts was $1,513,674, compared to $1,390,177 in 2023 and $1,254,141 in 2022. This revenue includes $259,581 in initial franchise fees, $37,350 from supplies packages, $984,777 from royalty fees, $144,481 from technology fees, and $87,485 from brand fund fees in 2024. These figures demonstrate the relative importance of each revenue stream, with royalty fees constituting the largest portion of Kitchen Solvers' income from franchisees.