When are renewal fees recognized by Beggars Pizza?
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 at a specific point in time. The document states that the renewal fee, which ranges from 10 to 33 percent of the initial franchise fee, is recognized 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 related to the renewal. This accounting practice aligns the revenue recognition with the delivery of services, which is a common and conservative approach.
It is important for franchisees to understand that while the renewal fee is due at the expiration of the franchise agreement, Beggars Pizza recognizes this fee as revenue only after completing their obligations. This could include providing updated training, manuals, or other support services related to the franchise renewal.