What was the royalty receivable-contract revenue for Beggars Pizza in 2021?
Beggars_Pizza Franchise · 2025 FDDAnswer from 2025 FDD Document
s ended December 31, 2022 and 2021, initial franchise fees included in revenue was $45,000 and $0, respectively. Initial franchise fees deferred totaled $37,500 and $25,000 at December 31, 2022 and 2021, respectively.
The Company records royalty revenue based on 5 percent of gross sales or $500 per month, whichever is hig
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 39)
What This Means (2025 FDD)
According to Beggars Pizza's 2025 Franchise Disclosure Document, royalty revenue for the year ending December 31, 2021, was $1,470,685. Beggars Pizza calculates royalty revenue as the greater of 5% of gross sales or $500 per month. This revenue is recognized over the term of the respective franchise agreement as the underlying sales occur.
For a prospective franchisee, this indicates the level of ongoing payments Beggars Pizza receives from its existing franchisees. It reflects the overall sales performance of the franchise system. Franchisees pay royalties based on their gross sales, which directly contributes to this revenue stream for Beggars Pizza.
It is important to note that royalty receivables are subject to adjustments for potential credit losses. The FDD states that the company assesses and provides an allowance for doubtful accounts, indicating that not all royalty revenue is guaranteed to be collected. This allowance was $10,000 as of December 31, 2021. Understanding the royalty structure and the factors influencing royalty revenue is crucial for potential franchisees to assess the financial stability and performance of the Beggars Pizza franchise system.