What are the two main sources of revenue for Beggars Pizza Franchise, LLC?
Beggars_Pizza Franchise · 2025 FDDAnswer from 2025 FDD Document
be recognized as an expense in future reporting periods as the printed menus are received by the Company.
Revenue Recognition – The Company's revenue mainly consists of franchise fees and royalties. The Company sells individual franchisees the right to operate a Beggars Pizza location within a defined territory using the franchise brand name.
Initial franchise fees are $25,000 for a restaurant with 150 or fewer seats and $40,000 for a restaurant with more than 150 seats. The Company offers a 50 percent franchise fee discount to a franchisee that opens a second store. This fee is due and nonrefundable upon signing the franchise agreement. The initial nonrefundable franchise fees, which are collected in advance, are recognized as revenue at a point in time franchisee opens their location, or upon termination of such agreement. At the expiration of a franchise agreement, a renewal fee ranging from 10 to 33 percent of the initial franchise fee is due and recognized at a point in time when services related to the renewal agreement are completed. For the years ended December 31, 2024 and 2023, initial franchise fees included in revenue was $8,250 and $28,250, respectively. Initial franchise fees deferred totaled $25,000 and $25,000 at December 31, 2024 and 2023, 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 ti
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 39)
What This Means (2025 FDD)
According to Beggars Pizza's 2025 Franchise Disclosure Document, the company's primary sources of revenue are franchise fees and royalties. Beggars Pizza generates revenue by granting franchisees the right to operate a Beggars Pizza location within a specific territory, utilizing the Beggars Pizza brand name.
Franchise fees consist of initial fees paid by new franchisees and renewal fees paid by existing franchisees. The initial franchise fee ranges from $25,000 to $40,000, depending on the restaurant's seating capacity. Renewal fees range from 10 to 33 percent of the initial franchise fee. These fees are recognized as revenue when a new franchise location opens or when renewal obligations are completed.
Royalty revenue is collected over time, based on 5 percent of gross sales or $500 per month, whichever is higher. For example, royalty revenue for the years ended December 31, 2024 and 2023, was $1,486,410 and $1,561,237, respectively. This ongoing royalty payment ensures a continuous revenue stream for Beggars Pizza based on the sales performance of its franchise locations.