What was the royalty receivable for Beggars Pizza at December 31, 2022?
Beggars_Pizza Franchise · 2025 FDDAnswer from 2025 FDD Document
sured limits. The Company has not experienced any losses 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. Prior to 2023, the Company estimated the allowance based on its historical experience of the relationship between actual bad debts and contract revenues. As a result of the changes in the Company's credit policy during 2023, the Company changed to estimating the allowance based on an analysis of individual customers adjusted for current conditions and reasonable forecasts, taking into consideration t
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 net collectible amounts. The document indicates that the allowance for credit losses was $10,000 at December 31, 2022. This allowance is an estimate of the amounts that Beggars Pizza believes it may not be able to collect from franchisees.
Beggars Pizza does not charge interest or late fees on past due amounts. Prior to 2023, the company estimated the allowance based on its historical experience of the relationship between actual bad debts and contract revenues.
For a prospective franchisee, this means that Beggars Pizza acknowledges that not all royalty payments may be collected in full and makes an accounting adjustment to reflect this possibility. The allowance for credit losses could fluctuate in future years based on the financial health of franchisees and changes to Beggars Pizza's credit policies.