What was the royalty receivable-contract revenue for Beggars Pizza in 2022?
Beggars_Pizza Franchise · 2025 FDDAnswer from 2025 FDD Document
$25,000 and $37,500 at December 31, 2023 and 2022, respectively.
1. Summary of Significant Accounting Policies (cont'd)
Revenue Recognition (cont'd)
The Company records royalty revenue based on 5 percent of gross s
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, 2022, was $1,475,563. Beggars Pizza calculates this royalty revenue based on the higher of 5% of gross sales or $500 per month from each franchise location. This revenue is recognized over time as the underlying sales occur throughout the term of the franchise agreement.
This figure represents the income Beggars Pizza received from its franchisees for the right to operate under the Beggars Pizza brand and system. It's a crucial indicator of the brand's overall performance and the sales volume generated by its franchise network. For a prospective franchisee, understanding the royalty structure and the historical royalty revenue is essential for projecting potential earnings and assessing the financial health of the franchise system.
It's important to note that this royalty revenue is a component of the variable consideration in the franchise agreement, directly tied to the franchisees' sales performance. Additionally, franchisees pay marketing fees, which are 1% of their weekly sales, directly to Beg Adv, LLC, and cover commissary needs through orders fulfilled by Begcom, LLC. These additional fees should be considered when evaluating the overall cost of operating a Beggars Pizza franchise.