What was the royalty receivable for Beggars Pizza contract revenue at December 31, 2024 and 2023?
Beggars_Pizza Franchise · 2025 FDDAnswer from 2025 FDD Document
sses in such accounts and believes it is not exposed to any significant credit risk on cash deposits.
Royalty Receivables – Royalty receivables are stated at the net collectible amount reduced by an allowance for credit losses. The Company does not charge interest or late fees on amounts past due. The Company estimates the allowance based on an analysis of individual customers adjusted for current conditions and reasonable forecasts, taking into consideration the age of past due accounts and an assessment of the
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 39)
What This Means (2025 FDD)
According to Beggars Pizza's 2025 Franchise Disclosure Document, royalty receivables are stated at the net collectible amount, reduced by an allowance for credit losses. Beggars Pizza does not charge interest or late fees on past due amounts. The allowance for credit losses was $10,000 at December 31, 2024 and 2023.
Prior to 2023, Beggars Pizza estimated the allowance based on its historical experience regarding bad debts and contract revenues. In 2023, the company changed its credit policy and began estimating the allowance based on an analysis of individual customers, adjusted for current conditions and reasonable forecasts, considering the age of past due accounts and the customer's ability to repay.
For a prospective Beggars Pizza franchisee, this means that the franchisor has a system in place to account for potential uncollectible royalty payments. The allowance for credit losses, which was $10,000 for both 2024 and 2023, indicates the amount of royalty revenue that Beggars Pizza anticipates it may not be able to collect from its franchisees. This is a standard accounting practice to provide a more accurate representation of the company's financial position.