What is included in royalty revenue for My Salon Suite's SMF and GTN brands?
My_Salon_Suite Franchise · 2025 FDDAnswer from 2025 FDD Document
Royalties are generally based on a percent of franchisee sales differing by brand ranging from 2% to 8% and are recognized at the time the underlying franchisee's sales occur. Advertising fund revenue for SMF and GTN is included in royalty revenue.
Source: Item 6 — Other Intangibles and Goodwill (FDD pages 274–314)
What This Means (2025 FDD)
According to the 2025 FDD, My Salon Suite's royalty revenue for the SMF (Suite Management Franchising, LLC) and GTN Capital Group, LLC brands includes advertising fund revenue. Royalties are generally a percentage of franchisee sales, differing by brand and ranging from 2% to 8%. This revenue is recognized at the time the underlying franchisee's sales occur.
For a prospective My Salon Suite franchisee, this means that the royalty fees they pay will contribute to both the general royalty revenue and the advertising fund. The royalty percentage can vary, so it's important to clarify the specific percentage applicable to their franchise agreement. The revenue recognition timing indicates that My Salon Suite recognizes royalties as franchisees make sales, aligning revenue with franchisee activity.
It is important to note that the advertising fund revenue is included in the royalty revenue for SMF and GTN. This means that a portion of the royalties paid by franchisees is specifically allocated to advertising and marketing efforts for these brands. This could be beneficial for franchisees as it ensures that there is a dedicated source of funding for promoting the brand and attracting customers.