Company: CCHH
Filing Date: 2025-09-12
Form Type: F-1/A
Source: 0001213900-25-087080
Chunk: 180

Company: CCH Holdings Ltd
Filing Date: 2025-09-12
Form: F-1/A
Chunk 180
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 licensees outside of Malaysia, they are required to pay a master license fee as in a fixed upfront payment for pre -openingand ongoing support services, the authorization of the access to the proprietary marks associated with the brand of Chicken Claypot House and/or Zi Wei Yuan, and the right to operate a fixed number of restaurants under the authorized brands. Additionally, for each restaurant such master licensee opens above the fixed number agreed or sub -franchisesto other third -parties, a fixed outlet license fee shall also be paid. Master license fee is higher than outlet license fee, since master license is granted with the overarching right to operate the business within a specified territory, including the power to grant outlet license within the territory. Renewal license fee is also required for extension of the license term. During the effective license term, licensees are also required to share a certain percentage of the applicable restaurant outlet’s gross revenues with the Group as royalties, which represents the majority of the consideration the Group receives under the licensing agreement. Royalty rates are generally between 5% to 7.5% for each restaurant outlet, and royalties are typically billed and settled on a monthly basis. Only one performance obligation is identified in the licensing agreement with licensees, since the Group has determined that the pre -openingand ongoing support services are highly interrelated with the franchise right and are therefore not distinct from providing the continuous access to the franchise license. Accordingly, revenues from administrative fees and license fees are recognized on a straight -linebasis over the applicable term as stated in each agreement, which is consistent with the licensee’s right to access and benefit from the proprietary marks during the period. Continuing payments from royalties are recognized as revenue when the related sales occur. From time to time, the Group provides additional support services to the licensees for which the Group charges direct reimbursements to cover the costs and expenses incurred, which are recognized as revenues from franchise licensing as occurred. F-15

CCH HOLDINGS LTD
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2024 (In U.S. Dollar, except for share data) 2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.) Others The Group also generates revenues from leasing out buildings. The Group recognizes revenues from leasing out buildings in the gross amount of contractual rent over the lease term on a straight -linebasis. Leasing revenue is recognized in accordance with ASC 842 (Note 2(n