When is the renewal fee recognized as revenue for a Beggars Pizza franchise?
Beggars_Pizza Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 39)
What This Means (2025 FDD)
According to Beggars Pizza's 2025 Franchise Disclosure Document, renewal fees are recognized as revenue at a specific point in time. This occurs when the services related to the renewal agreement are completed.
For a prospective Beggars Pizza franchisee, this means that the franchisor does not recognize the renewal fee as revenue until they have fulfilled their obligations as part of the renewal process. The renewal fee for a Beggars Pizza franchise ranges from 10 to 33 percent of the initial franchise fee.
This accounting practice ensures that Beggars Pizza recognizes revenue only when they have delivered the services associated with the franchise renewal. This is a standard accounting practice, as it aligns revenue recognition with the actual delivery of services, providing a more accurate reflection of the company's financial performance.