What were the net sales (royalties and other revenues) for Beggars Pizza in 2022?
Beggars_Pizza Franchise · 2025 FDDAnswer from 2025 FDD Document
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, 2022 and 2021, initial franchise fees included in revenue was $45,000 and $0, respectively. Initial franchise fees deferred totaled $37,500 and $25,000 at December 31, 2022 and 2021, respectively.
The Company
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 39)
What This Means (2025 FDD)
According to Beggars Pizza's 2025 Franchise Disclosure Document, the company recorded royalty revenue of $1,475,563 for the year ended December 31, 2022. This royalty revenue is based on franchisees paying the greater of 5 percent of gross sales or $500 per month.
In addition to royalty revenue, Beggars Pizza also earns revenue from initial franchise fees. In 2022, the company recognized $45,000 in initial franchise fees. These fees are $25,000 for a restaurant with 150 or fewer seats and $40,000 for a restaurant with more than 150 seats. A 50 percent discount is offered to franchisees opening a second store.
Therefore, the total revenue from royalties and initial franchise fees recognized by Beggars Pizza in 2022 was $1,520,563 ($1,475,563 in royalty revenue plus $45,000 in initial franchise fees). It is important to note that franchisees also pay marketing fees of 1% of their weekly sales directly to Beg Adv, LLC, and order commissary supplies from Begcom, LLC, which are affiliated entities. These payments are not included in the revenue reported for Beggars Pizza Franchise, LLC.