How does Beggars Pizza record royalty revenue?
Beggars_Pizza Franchise · 2025 FDDAnswer from 2025 FDD Document
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 ti
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 39)
What This Means (2025 FDD)
According to Beggars Pizza's 2025 Franchise Disclosure Document, the company records royalty revenue based on a percentage of gross sales or a fixed monthly amount, whichever is higher. Specifically, Beggars Pizza records royalty revenue based on 5 percent of gross sales or $500 per month, over time.
For a prospective franchisee, this means that each month, they will pay Beggars Pizza either 5% of their gross sales for that month, or $500, depending on which amount is greater. This is a common arrangement in the franchise industry, where franchisors collect royalties as a percentage of sales to align the franchisor's income with the franchisee's success.
The FDD also notes the royalty revenue for the years ended December 31, 2024 and 2023, was $1,486,410 and $1,561,237, respectively. This gives a potential franchisee an idea of the total royalty income Beggars Pizza collects from all of its franchisees, although it does not specify how many franchisees contributed to that revenue.