Besides revenue from franchisees, what are the other revenue sources for Ben Jerrys?
Ben_Jerrys Franchise · 2025 FDDAnswer from 2025 FDD Document
is recognized in accordance with the five-step revenue model under ASU 2014-09, Revenue from Contracts with Customers (Topic 606) as follows; identifying the contract with the customer; identifying the performance obligations in the contract; determining the transaction price; allocating the transaction price to the performance obligations; and recognizing revenue when (or as) the entity satisfies a performance obligation.
9
The following are the main revenue streams for Ben & Jerry's Franchising:
- Revenue arising from Franchisees:
- Franchise license fees
- Royalties
Notes to Consolidated Financial Statements
December 31, 2024 and 2023
(Dollars in Thousands)
- Advertising fees
- Other revenues
- Net Product Sales from Company owned stores
- Commission Revenue from Parent
The Company's primary performance obligation related to revenue arising from Franchisees is granting certain rights to use the Company's intellectual property, and all other services the Company provides under the franchise agreement are highly interrelated, not distinct within the contract, and therefore accounted for under ASC 606 as a single performance obligation, which is satisfied over the term of each franchise agreement.
The Company has two company owned scoop shops as noted in b) above. These locations generate net product sales through customers purchasing ice cream and related products at a point in time (the customer transaction represents a single performance obligation that is satisfied in the shop) and are fully functioning scoop shops that mirror our independent franchisees. These shops report all their sales to the Company which appear as Net Product Sales on the Consolidated Statement of Operations. The Company pays all the expenses on behalf of the two locations.
Source: Item 21 — FINANCIAL STATEMENTS (FDD pages 89–133)
What This Means (2025 FDD)
According to Ben Jerrys's 2025 Franchise Disclosure Document, the company has revenue streams beyond those generated by its franchisees. These additional revenue sources include net product sales from company-owned stores and commission revenue from its parent company.
The net product sales are derived from the two company-owned scoop shops, where customers purchase ice cream and related products. These shops function similarly to independently owned franchises, reporting all sales to Ben Jerrys, which are then recorded as Net Product Sales on the Consolidated Statement of Operations. Ben Jerrys also covers all expenses for these locations.
Commission revenue is earned from Ben Jerrys's parent company based on the parent's gross manufacture and sales of ice cream products and ingredients specific to the franchise business. This commission is recognized when these products are sold by the parent company to Unilever's North America Supply Chain Company, which then distributes the products. In 2023 and 2022, the commission revenue earned was $4,644 and $4,706 (in thousands), respectively.