If a franchisee obtains financing, does Beggars Pizza receive any fees?
Beggars_Pizza Franchise · 2025 FDDAnswer from 2025 FDD Document
u printing services that will be recognized as an expense in future reporting periods as the printed menus are received by the Company.
Revenue Recognition – 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 years ended December 31, 2023 and 2022, initial franchise fees inc
Source: Item 10 — FINANCING (FDD page 19)
What This Means (2025 FDD)
Based on the 2025 Franchise Disclosure Document, it is not clear whether Beggars Pizza receives fees if a franchisee obtains financing. The provided excerpts from the FDD do not discuss any fees paid to Beggars Pizza related to franchisee financing.
However, the FDD does detail various fees that franchisees are required to pay, such as initial franchise fees ($25,000 for a restaurant with 150 or fewer seats and $40,000 for a restaurant with more than 150 seats), royalty fees (5% of gross sales or $500 per month, whichever is higher), and marketing fees (1% of franchisee weekly sales paid to Beg Adv, LLC). There are also revenues derived from required franchisee purchases from Begcom, LLC.
To determine whether Beggars Pizza receives any fees related to franchisee financing, a prospective franchisee should review the complete FDD and franchise agreement, and directly ask the franchisor about any potential fees or financial arrangements related to financing.