How does Beggars Pizza calculate royalty revenue?

According to Beggars Pizza's 2025 Franchise Disclosure Document, the company calculates royalty revenue based on a percentage of gross sales or a fixed monthly fee, whichever is higher. Specifically, Beggars Pizza records royalty revenue as 5 percent of gross sales or $500 per month, whichever amount is greater. This revenue is recognized over the term of the franchise agreement as the sales occur.

For a prospective franchisee, this means that they will pay a royalty fee to Beggars Pizza that is either 5% of their total sales or a flat $500, depending on which is the larger amount. If a franchisee's gross sales are low, they will still be required to pay the minimum royalty fee of $500. Conversely, if their sales are high, their royalty payment will increase proportionally.

This type of royalty structure is fairly common in the franchise industry, as it provides the franchisor with a consistent revenue stream while also allowing them to benefit from the franchisee's success. Franchisees should carefully consider their projected sales volume to understand how the royalty structure will impact their profitability. They should also be aware that the royalty fee is ongoing and will be a recurring expense throughout the term of their franchise agreement.