---
title: Franchise Fees
description: Initial fees paid to open a location, requiring distinct obligations to be heavily scrutinized and often unbundled. Equipment transfers may be recogni...
sidebar_position: 41
tags: ['asc-606', 'Billing']
---

# Franchise Fees

## The ASC 606 Standard

Initial fees paid to open a location, requiring distinct obligations to be heavily scrutinized and often unbundled. Equipment transfers may be recognized immediately, while brand access is amortized over years.

## The Real-World Scenario

A franchisee pays you $100,000 to open a new location, which covers ovens, signage, and a 10-year right to use your brand name.

## The Spreadsheet Breaking Point

Manually separating point-in-time equipment sales from over-time brand access fees for every new franchisee is a massive administrative burden.

## The Hidden Cost to the Bottom Line

Recognizing the entire upfront franchise fee immediately is an audit failure that will force years of retroactive accounting fixes.

## How GAAPX Eliminates the Risk

Automatically unbundles initial fees based on exact SSP, applying instant recognition for equipment and amortized schedules for brand access.