According to Beggars Pizza's 2025 Franchise Disclosure Document, the net royalty receivables, after allowance for credit losses, was $120,986 in 2023. The allowance for credit losses was $10,000 in both 2023 and 2022. This indicates the amount Beggars Pizza anticipates it may not collect from franchisees due to non-payment of royalties.

For a prospective Beggars Pizza franchisee, this figure provides insight into the financial health and royalty collection efficiency of the company. It's important to understand how Beggars Pizza manages and accounts for potential credit losses, as this can affect the overall financial stability of the franchise system. A consistent allowance for credit losses might suggest a stable but persistent challenge in collecting royalties from some franchisees.

It is also worth noting that Beggars Pizza changed its credit policy during 2023. Prior to 2023, the company estimated the allowance based on its historical experience of the relationship between actual bad debts and contract revenues. As a result of the changes in the Company's credit policy during 2023, the Company changed to estimating the allowance based on an analysis of individual customers adjusted for current conditions and reasonable forecasts, taking into consideration the age of past due accounts and an assessment of the customer's ability to repay.

Prospective franchisees may want to inquire about the specific criteria and processes Beggars Pizza uses to determine the allowance for credit losses and what measures are in place to support franchisees who may be struggling to meet their royalty obligations. Understanding these aspects can help a franchisee assess the potential risks and rewards of investing in a Beggars Pizza franchise.