How much did Beggars Pizza spend on management fees in 2022?
Beggars_Pizza Franchise · 2025 FDDAnswer from 2025 FDD Document
de evaluation of events up through and including March 22, 2024, which is the date the financial statements were available to be issued.
2. Related Party Transactions
The Company has a management fee agreement with Begcom, LLC, a related party through common ownership. The agreement expires on December 31, 2028. Management fees totaled $579,820 and $666,106 for the years ended December 31, 2023 and 2022, respectiv
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 39)
What This Means (2025 FDD)
According to Beggars Pizza's 2025 Franchise Disclosure Document, the company had a management fee agreement with Begcom, LLC, a related party through common ownership. The agreement is set to expire on December 31, 2028. In 2022, Beggars Pizza's management fees totaled $666,106. As of December 31, 2022, the management fees due to Begcom, LLC amounted to $9,166, which were included in accounts payable on the balance sheet.
This indicates that Beggars Pizza allocates a significant amount to management fees, which prospective franchisees should consider as part of their financial due diligence. Understanding the nature of these fees and the services provided by Begcom, LLC, is crucial. Since Begcom, LLC is a related party, it's important to ensure that the fees are reasonable and reflect fair market value.
For a prospective franchisee, this information highlights the importance of reviewing the franchise agreement and financial statements carefully. It would be prudent to inquire about the specific services covered by the management fees and the relationship between Beggars Pizza and Begcom, LLC. Additionally, comparing these fees to industry benchmarks can help assess their reasonableness.