What are the three primary sources of revenue for Ledgers?

According to the 2025 Ledgers Franchise Disclosure Document, the company's revenue stems from three main sources. These are franchise fees and area representative sales, royalty fees generated from franchisees, and referral fees earned from vendors. Understanding these revenue streams is crucial for prospective franchisees as it sheds light on how Ledgers, as the franchisor, sustains its operations and profitability.

Franchise fees and area representative sales represent initial payments made by franchisees and area representatives for the rights to operate under the Ledgers brand. These fees are typically recognized over the life of the franchise agreement, which generally spans 5 to 10 years. Royalty fees, on the other hand, are ongoing payments from franchisees, calculated as the greater of 14% of gross receipts or an annual minimum outlined in the franchise agreement, along with monthly advertising fees of 3% of gross revenues.

Lastly, Ledgers also earns revenue through referral fees by connecting its franchisees with various vendors. These referral fee arrangements differ by vendor and are typically earned when a franchisee enrolls with a particular vendor. This diversified revenue model indicates that Ledgers' financial health is tied to both the initial expansion of its franchise network and the ongoing success and vendor relationships of its franchisees.