What are the main sources of revenue for Beggars Pizza?
Beggars_Pizza Franchise · 2025 FDDAnswer from 2025 FDD Document
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, 2024 and 2023, initial franchise fees included in revenue was $8,250 and $28,250, respectively. Initial franchise fees deferred totaled $25,000 and $25,000 at December 31, 2024 and 2023, respectively.
1. Summary of Significant Accounting Policies (cont'd)
Revenue Recognition (cont'd)
The Company records royalty revenue based on 5 percent of gross sales or $500 per month, whichever is higher, over ti
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 39)
What This Means (2025 FDD)
According to Beggars Pizza's 2025 Franchise Disclosure Document, the company's main sources of revenue are franchise fees and royalties. Beggars Pizza grants franchisees the right to operate a Beggars Pizza location within a specific territory using the Beggars Pizza brand name.
Beggars Pizza collects initial franchise fees, which vary depending on the restaurant size. The initial franchise 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 on the franchise fee is offered for franchisees opening a second store. These fees are nonrefundable and due upon signing the franchise agreement. The initial franchise fees are recognized as revenue when the franchisee opens their location or if the agreement is terminated. For example, initial franchise fees included in revenue were $8,250 for the year ended December 31, 2024, and $28,250 for the year ended December 31, 2023. Deferred initial franchise fees totaled $25,000 at the end of both 2024 and 2023.
Beggars Pizza also generates revenue through royalties, which are calculated as 5% of gross sales or $500 per month, whichever is higher. Royalty revenue was $1,486,410 for the year ended December 31, 2024, and $1,561,237 for the year ended December 31, 2023. At the expiration of a franchise agreement, Beggars Pizza charges a renewal fee ranging from 10% to 33% of the initial franchise fee, which is recognized as revenue when services related to the renewal agreement are completed.