2. Royalties and Fees	9 Months Ended
Sep. 30, 2016
Notes to Financial Statements
2. Royalties and Fees	Royalties and fees include initial franchise fees of $87,000 and $153,000 for the three-month and nine-month periods ended September 30, 2015 and $76,000 and $204,000 for the three-month and nine-month periods ended September 30, 2016, respectively. Royalties and fees included equipment commissions of $23,000 and $60,000 for the three-month and nine-month periods ended September 30, 2015, and $7,000 and $17,000 for the three-month and nine-month periods ended September 30, 2016, respectively. Royalties and fees including interest per franchise agreements, less initial franchise fees and equipment commissions, were $1.7 million and $5.4 million for the respective three-month and nine-month periods ended September 30, 2015, and $1.9 million and $5.3 million for the respective three-month and nine-month periods ended September 30, 2016. 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. A significant amount of the Company’s royalty income is paid by the Company initiating a draft on the franchisee’s account by electronic withdrawal. There were 2,562 franchises/licenses on December 31, 2015 and 2,736 franchises/licenses on September 30, 2016. During the nine-month period ended September 30, 2016, there were 201 new outlets opened and 27 outlets closed. In the ordinary course, grocery stores from time to time add our licensed products, remove them and may subsequently re-offer them. Therefore, it is unknown how many licensed grocery store units included in the count above have left the system.

2. Royalties and Fees

9 Months Ended

Sep. 30, 2016

Royalties and fees include initial franchise fees of $87,000 and $153,000 for the three-month and nine-month periods ended September 30, 2015 and $76,000 and $204,000 for the three-month and nine-month periods ended September 30, 2016, respectively. Royalties and fees included equipment commissions of $23,000 and $60,000 for the three-month and nine-month periods ended September 30, 2015, and $7,000 and $17,000 for the three-month and nine-month periods ended September 30, 2016, respectively. Royalties and fees including interest per franchise agreements, less initial franchise fees and equipment commissions, were $1.7 million and $5.4 million for the respective three-month and nine-month periods ended September 30, 2015, and $1.9 million and $5.3 million for the respective three-month and nine-month periods ended September 30, 2016. 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. A significant amount of the Company’s royalty income is paid by the Company initiating a draft on the franchisee’s account by electronic withdrawal.

There were 2,562 franchises/licenses on December 31, 2015 and 2,736 franchises/licenses on September 30, 2016. During the nine-month period ended September 30, 2016, there were 201 new outlets opened and 27 outlets closed. In the ordinary course, grocery stores from time to time add our licensed products, remove them and may subsequently re-offer them. Therefore, it is unknown how many licensed grocery store units included in the count above have left the system.