What was the royalty revenue for Beggars Pizza for the year ended December 31, 2022?
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
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 39)
What This Means (2025 FDD)
According to Beggars Pizza's 2025 Franchise Disclosure Document, the royalty revenue for the year ended December 31, 2022, was $1,475,563. Beggars Pizza calculates royalty revenue as the greater of 5% of gross sales or $500 per month.
This figure represents the income Beggars Pizza Franchise, LLC received from its franchisees based on their sales. For a prospective franchisee, this indicates the ongoing cost of operating a Beggars Pizza franchise, which is tied to their revenue. The royalty structure incentivizes Beggars Pizza to support its franchisees in increasing their sales, as the franchisor's income directly benefits from the franchisees' success.
It's important to note that this royalty revenue is a significant component of Beggars Pizza's overall income, alongside initial franchise fees and renewal fees. The FDD also mentions that franchisees pay a marketing fee equal to 1% of their weekly sales directly to Beg Adv, LLC, and that commissary stores are ordered from and fulfilled by Begcom, LLC. These additional fees should be considered when evaluating the total cost of operating a Beggars Pizza franchise.
Understanding the royalty structure and the franchisor's revenue streams is crucial for potential franchisees. It provides insight into the financial relationship between the franchisee and franchisor and helps in assessing the long-term profitability and sustainability of the franchise investment.