What was the net amount of royalty receivables for Beggars Pizza in 2024, after allowance for credit losses?
Beggars_Pizza Franchise · 2025 FDDAnswer from 2025 FDD Document
and believes it is not exposed to any significant credit risk on cash deposits.
Royalty Receivables – Royalty receivables are stated at the net collectible amount reduced by an allowance for credit losses. The Company does not charge interest or late fees on amounts past due. The Company estimates 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
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 39)
What This Means (2025 FDD)
According to Beggars Pizza's 2025 Franchise Disclosure Document, royalty receivables are recorded at the net collectible amount, which means the total amount owed to Beggars Pizza after subtracting an allowance for potential credit losses. This allowance accounts for the possibility that some franchisees may not be able to pay their full royalty obligations.
The FDD states that Beggars Pizza estimates this allowance based on an analysis of individual customers, considering current conditions, reasonable forecasts, the age of past due accounts, and the customer's ability to repay. For the years 2024 and 2023, the allowance for credit losses was $10,000.
Therefore, while the FDD explains how Beggars Pizza determines the allowance for credit losses related to royalty receivables, it does not provide the gross amount of royalty receivables before the allowance. As a result, the net amount of royalty receivables (after subtracting the $10,000 allowance) cannot be determined from the provided documentation. A prospective franchisee should ask Beggars Pizza for the gross royalty receivables amount to fully understand the potential impact of uncollectible royalties.