Does Beggars Pizza charge interest or late fees on past due royalty receivables?

According to Beggars Pizza's 2025 Franchise Disclosure Document, the company does not charge interest or late fees on royalty receivables that are past due. This policy is part of Beggars Pizza's accounting practices for royalty receivables. Royalty receivables are stated at the net collectible amount, reduced by an allowance for credit losses.

This practice can be beneficial for franchisees as it provides some flexibility in managing payments without incurring additional charges. However, it's important to note that while Beggars Pizza doesn't charge interest or late fees, they do account for potential credit losses by establishing an allowance. For 2024 and 2023, the allowance for credit losses was $10,000.

Beggars Pizza estimates this allowance based on an analysis of individual customers, considering current conditions, reasonable forecasts, the age of past due accounts, and the customer's ability to repay. This indicates that while late fees aren't applied, Beggars Pizza actively assesses and manages the risk of non-payment, which could affect franchisees indirectly through stricter payment monitoring or other credit-related policies. Franchisees should maintain open communication with Beggars Pizza regarding any potential payment issues to avoid being categorized as a credit risk.