2. Royalties and Fees	9 Months Ended
Sep. 30, 2013
Notes to Financial Statements
2. Royalties and Fees	Royalties and fees included initial franchise fees of $131,000 and $256,000 for the three-month and nine-month periods ended September 30, 2012, and $340,000 and $675,000 for the three-month and nine-month periods ended September 30, 2013, respectively. Royalties and fees included equipment commissions of $32,000 and $55,000 for the three-month and nine-month periods ended September 30, 2012, and $31,000 and $61,000 for the three-month and nine-month periods ended September 30, 2013, respectively. Royalties and fees, less initial franchise fees and equipment commissions were $1.6 million and $4.9 million for the respective three-month and nine-month periods ended September 30, 2012, however those amounts included $100,000 and $400,000, respectively, to increase the estimated net realizable value of receivables in the Heyser case related to units no longer in operation. Without those adjustments, royalties and fees, less initial franchise fees and equipment commissions were $1.5 million and $4.5 million for the three-month and nine-month periods ended September 30, 2012 and $1.5 million and $4.7 million for the respective three-month and nine-month periods ended September 30, 2013. Most of the cost for the services required to be performed by the Company are incurred prior to the franchise fee income being recorded, which is based on a contractual liability of the franchisee. For the most part, the Company’s royalty income is paid by the Company initiating a draft on the franchisee’s account by electronic withdrawal. The Company has no material amount of past due royalties. There were 1,847 franchises/licenses in operation on December 31, 2012 and 1,992 franchises/licenses in operation on September 30, 2013. During the nine-month period ended September 30, 2013 there were 169 new outlets opened and 24 outlets closed. In the ordinary course, grocery stores from time to time add products, remove them and subsequently re-offer them. Therefore, it is unknown how many licensed grocery store units have left the system.

2. Royalties and Fees

9 Months Ended

Sep. 30, 2013

Royalties and fees included initial franchise fees of $131,000 and $256,000 for the three-month and nine-month periods ended September 30, 2012, and $340,000 and $675,000 for the three-month and nine-month periods ended September 30, 2013, respectively. Royalties and fees included equipment commissions of $32,000 and $55,000 for the three-month and nine-month periods ended September 30, 2012, and $31,000 and $61,000 for the three-month and nine-month periods ended September 30, 2013, respectively. Royalties and fees, less initial franchise fees and equipment commissions were $1.6 million and $4.9 million for the respective three-month and nine-month periods ended September 30, 2012, however those amounts included $100,000 and $400,000, respectively, to increase the estimated net realizable value of receivables in the Heyser case related to units no longer in operation. Without those adjustments, royalties and fees, less initial franchise fees and equipment commissions were $1.5 million and $4.5 million for the three-month and nine-month periods ended September 30, 2012 and $1.5 million and $4.7 million for the respective three-month and nine-month periods ended September 30, 2013. Most of the cost for the services required to be performed by the Company are incurred prior to the franchise fee income being recorded, which is based on a contractual liability of the franchisee. For the most part, the Company’s royalty income is paid by the Company initiating a draft on the franchisee’s account by electronic withdrawal. The Company has no material amount of past due royalties.

There were 1,847 franchises/licenses in operation on December 31, 2012 and 1,992 franchises/licenses in operation on September 30, 2013. During the nine-month period ended September 30, 2013 there were 169 new outlets opened and 24 outlets closed. In the ordinary course, grocery stores from time to time add products, remove them and subsequently re-offer them. Therefore, it is unknown how many licensed grocery store units have left the system.