How does Ben Jerrys recognize revenue and related costs for company-owned stores?
Ben_Jerrys Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
Source: Item 21 — FINANCIAL STATEMENTS (FDD pages 89–133)
What This Means (2025 FDD)
According to Ben Jerrys's 2025 Franchise Disclosure Document, revenue and related costs for company-owned stores are recognized when the product is sold to the consumer. The customer transaction at the point of sale represents a single performance obligation that is satisfied in the shop. These company-owned scoop shops mirror the operations of independent franchisees. All sales from these locations are reported as Net Product Sales on the Consolidated Statement of Operations. Ben Jerrys pays all the expenses for these locations.
In 2023, Net product sales totaled $5,770 (in thousands), while in 2022, they amounted to $4,338 (in thousands). The cost of sales was $1,748 (in thousands) in 2023 and $1,448 (in thousands) in 2022. This indicates a direct relationship between sales and costs, aligning with the point-of-sale recognition method.
This accounting practice is standard for retail operations, where revenue and costs are directly linked to the transaction. For a prospective franchisee, this means that the financial statements will clearly reflect the performance of company-owned stores, providing a benchmark for potential franchise performance. Understanding how these figures are derived can help franchisees better interpret their own financial results and compare them against the company's operations.