When does Ben Jerrys recognize revenue related to the advertising fees?
Ben_Jerrys Franchise · 2025 FDDAnswer from 2025 FDD Document
her revenues
For Company owned stores, revenue and the related costs are recognized when product is sold to the consumer.
Notes to Consolidated Financial Statements
December 31, 2024 and 2023
(Dollars in Thousands)
Commission revenue from the Parent is recognized in the period the ice cream is sold at a rate of 20% for all scoop shop related ice cream sales that the Parent sells to UNASCC as noted above.
(k) Advertising
Advertising costs are expensed as incurred. Promotional costs are expensed no later than at the start of the related promotional event. The Company receives advertising fees from franchisees for an amount up to 2% of their gross sales. The Company uses these fees, combined with additional amounts paid by the Company, to fund the advertising activities for the franchise operations.
The Company is obligated to spend the fees on behalf of the franchise shops.
Total adver
Source: Item 21 — FINANCIAL STATEMENTS (FDD pages 89–133)
What This Means (2025 FDD)
According to Ben Jerrys's 2025 Franchise Disclosure Document, advertising costs are expensed as they are incurred. Ben Jerrys receives advertising fees from franchisees, up to 2% of their gross sales, and uses these fees combined with their own contributions to fund advertising activities for the franchise operations. Ben Jerrys is obligated to spend these advertising fees on behalf of the franchise shops.
In 2024, Ben Jerrys incurred approximately $2,058 in advertising costs, while in 2023, the costs were approximately $2,145. The advertising fees charged to franchised shops totaled approximately $2,191 in 2024 and $2,057 in 2023. These fees are included in the revenue arising from franchisees. In 2024, the advertising revenue charged exceeded advertising costs by $133, while in 2023, advertising costs exceeded revenue by $88.
This means that Ben Jerrys recognizes the advertising revenue as it receives the fees from franchisees, and it expenses the advertising costs as they are incurred. The advertising fees are part of the revenue generated from franchisees. The FDD indicates that Ben Jerrys aims to balance the advertising fees collected with the advertising costs incurred, although there can be slight differences between the two in any given year.