What were the deferred franchise fees for Beggars Pizza in 2021?
Beggars_Pizza Franchise · 2025 FDDAnswer from 2025 FDD Document
The Company's revenue mainly consists of franchise fees and royalties. The Company sells individual franchisees the right to operate a Beggars Pizza location within a defined territory using the franchise brand name.
Initial franchise fees are $25,000 for a restaurant with 150 or fewer seats and $40,000 for a restaurant with more than 150 seats. The Company offers a 50 percent franchise fee discount to a franchisee that opens a second store. This fee is due and nonrefundable upon signing the franchise agreement. The initial nonrefundable franchise fees, which are collected in advance, are recognized as revenue at a point in time franchisee opens their location, or upon termination of such agreement. At the expiration of a franchise agreement, a renewal fee ranging from 10 to 33 percent of the initial franchise fee is due and recognized at a point in time when services related to the renewal agreement are completed. For the yea
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 39)
What This Means (2025 FDD)
According to Beggars Pizza's 2025 Franchise Disclosure Document, the initial franchise fees deferred totaled $25,000 as of December 31, 2021. This deferred revenue represents franchise fees that Beggars Pizza has collected but not yet recognized as revenue on its income statement.
Beggars Pizza collects initial franchise fees when a franchisee signs the franchise agreement. The fee is $25,000 for a restaurant with 150 or fewer seats and $40,000 for a restaurant with more than 150 seats. A 50% discount is offered to franchisees opening a second store. However, Beggars Pizza does not recognize this revenue immediately. Instead, it defers the revenue recognition until the franchisee opens their location or the franchise agreement is terminated. This accounting practice aligns the revenue recognition with the point in time when Beggars Pizza has fulfilled its obligations to the franchisee.
For a prospective Beggars Pizza franchisee, the deferred franchise fee balance indicates the amount of future revenue Beggars Pizza expects to recognize as its franchisees open new locations. It's a key indicator of the company's financial health and growth trajectory. Monitoring the trend in deferred franchise fees can provide insights into the company's ability to attract new franchisees and expand its brand presence.