What was the royalty receivable-contract revenue for Beggars Pizza in 2020?
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 time. Royalty revenue for the years ended December 31, 2024 and 2023, was $1,486,410 and $1,561,237, respectively.
The Company has obligations to provide franchisees with the franchise rights to operate a Beggars Pizza store, and to assist with site selection, training, preparing and distributing operating manuals and menus, and with conducting inspections under their quality control program. The Company has elected the practical expedient to account for the pre-opening services provided to franchisees as distinct from the franchise license and recognize pre-opening services as a single performance obligation. Therefore, the initial franchise fee for each agreement is allocated to each individual franchise and recognized at a point in time when a new franchise location opens. Renewal fees are recognized at a point in time when renewal performance obligations are completed. Income for royalties are recognized over the term of the respective franchise agreement as the underlying sales occur.
The transaction price is the amount of consideration to which the Company expects to be entitled in exchange for providing franchisees with the franchise rights to operate a store. To determine the transaction price, the Company considers its customary business practices and the terms of the underlying agreement. For the purpose of determining transaction prices, the Company assumes performance obligations will be satisfied as promised in accordance with franchise agreements and that agreements will not be canceled, renewed or modified. The Company's franchise agreements with franchisees have transaction prices that contain a fixed and variable component. Variable consideration includes revenue related to royalties, as the transaction price is based on the franchisees sales. The variable consideration is recognized based on the actual amounts incurred each month. Franchisees receive additional services such as marketing and commissary needs, which are provided by affiliated entities as allowed by the franchise agreement. Marketing fees totaling 1% of the franchisee weekly sales are paid by franch
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 39)
What This Means (2025 FDD)
Based on the 2025 Franchise Disclosure Document, the royalty receivable-contract revenue for Beggars Pizza in 2020 is not explicitly stated. The document provides royalty revenue figures for the years 2021, 2022, 2023 and 2024.
Specifically, the FDD mentions that Beggars Pizza records royalty revenue based on 5 percent of gross sales or $500 per month, whichever is higher. The royalty revenue for the years ended December 31, 2024 and 2023, was $1,486,410 and $1,561,237, respectively. Also, the royalty revenue for the years ended December 31, 2023 and 2022, was $1,561,237 and $1,475,563, respectively. Finally, the royalty revenue for the years ended December 31, 2022 and 2021, was $1,475,563 and $1,470,685, respectively.
To get the royalty receivable-contract revenue for 2020, a prospective franchisee should consider asking Beggars Pizza directly for this information. Reviewing past performance can provide insight into the stability and growth of the franchise's revenue streams.