Royalties and Fees	6 Months Ended
Jun. 30, 2022
Royalties and Fees
Note 2 - Royalties And Fees	Note 2 – Royalties and fees included initial franchise fees of $60,000 for the three-month period ended June 30, 2022, and $97,000 for the three-month period ended June 30, 2021. Royalties and fees included equipment commissions of $20,800 for the three-month period ended June 30, 2022, and $13,000 for the three-month period ended June 30, 2021. Royalties and fees, including amortized initial franchise fees and equipment commissions, were $1.1 million for the three-month period ended June 30, 2022, and $1.2 million for the three-month period ended June 30, 2021. 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. The effect on comparable periods within the financial statements by recording franchise fees and cost of opening the units as deferred contract costs and deferred contract income is not material as the initial franchise fee for the non-traditional franchise is intended to defray the initial contract costs, and the franchise fees and contract costs initially incurred and paid approximate the relative amortized franchise fees and contract costs for those same periods. The deferred contract income and deferred costs were $864,590 on June 30, 2022. At December 31, 2021 and June 30, 2022, the carrying value of the Company’s franchise receivables have been reduced to anticipated realizable value. As a result of this reduction of carrying value, the Company anticipates that substantially all of its accounts receivables reflected on the consolidated balance sheets as of December 31, 2021 and June 30, 2022, will be collected. In 2020, in light of the additional uncertainty created as a result of the COVID 19 pandemic, the Company decided to create a reserve for uncollectability on all long-term franchisee receivables. The Company will continue to pursue collection where circumstances are appropriate and all collections of these receivables in the future will result in additional royalty income at the time received. There were 3,069 franchises/licenses in operation on December 31, 2021 and 3,081 franchises/licenses were in operation on June 30, 2022. During the six-month period ended June 30, 2022 there were 16 new outlets opened and four 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 of the 2,404 licensed grocery store units included in the counts above have left the system.

Royalties and Fees

6 Months Ended

Jun. 30, 2022

Note 2 – Royalties and fees included initial franchise fees of $60,000 for the three-month period ended June 30, 2022, and $97,000 for the three-month period ended June 30, 2021. Royalties and fees included equipment commissions of $20,800 for the three-month period ended June 30, 2022, and $13,000 for the three-month period ended June 30, 2021. Royalties and fees, including amortized initial franchise fees and equipment commissions, were $1.1 million for the three-month period ended June 30, 2022, and $1.2 million for the three-month period ended June 30, 2021. 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.

The effect on comparable periods within the financial statements by recording franchise fees and cost of opening the units as deferred contract costs and deferred contract income is not material as the initial franchise fee for the non-traditional franchise is intended to defray the initial contract costs, and the franchise fees and contract costs initially incurred and paid approximate the relative amortized franchise fees and contract costs for those same periods.

The deferred contract income and deferred costs were $864,590 on June 30, 2022.

At December 31, 2021 and June 30, 2022, the carrying value of the Company’s franchise receivables have been reduced to anticipated realizable value. As a result of this reduction of carrying value, the Company anticipates that substantially all of its accounts receivables reflected on the consolidated balance sheets as of December 31, 2021 and June 30, 2022, will be collected. In 2020, in light of the additional uncertainty created as a result of the COVID 19 pandemic, the Company decided to create a reserve for uncollectability on all long-term franchisee receivables. The Company will continue to pursue collection where circumstances are appropriate and all collections of these receivables in the future will result in additional royalty income at the time received.

There were 3,069 franchises/licenses in operation on December 31, 2021 and 3,081 franchises/licenses were in operation on June 30, 2022. During the six-month period ended June 30, 2022 there were 16 new outlets opened and four 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 of the 2,404 licensed grocery store units included in the counts above have left the system.