What were the net sales (royalties and other revenues) for Beggars Pizza in 2023?
Beggars_Pizza Franchise · 2025 FDDAnswer from 2025 FDD Document
es 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 time.
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 $1,561,237 for the year ending December 31, 2023. This royalty revenue is based on franchisees paying 5% of their gross sales or a minimum of $500 per month, whichever is higher. This income is recognized over the term of the respective franchise agreement as the underlying sales occur.
In addition to royalty fees, Beggars Pizza also collects initial franchise fees. For the year ending December 31, 2023, the initial franchise fees included in revenue totaled $28,250. 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% discount is offered to franchisees opening a second store. These fees are nonrefundable and recognized as revenue when the franchisee opens their location or upon termination of the agreement.
Therefore, the combined revenue from royalties and initial franchise fees for Beggars Pizza in 2023 was $1,589,487 ($1,561,237 in royalties plus $28,250 in initial franchise fees). It is important to note that franchisees also pay marketing fees and commissary costs to affiliated entities, Beg Adv, LLC and Begcom, LLC, respectively. These fees are not included in the royalty revenue reported for Beggars Pizza Franchise, LLC.