What was the total amount of royalty income that Ben Jerrys recognized over time in 2022?
Ben_Jerrys Franchise · 2025 FDDAnswer from 2025 FDD Document
| 2023 | 2022 | |
|---|---|---|
| Revenues recognized over time: | ||
| Franchise fees | 33 | 24 |
| Royalty income | 2,603 | 1,594 |
| Advertising fees | 2,057 | 2,019 |
| Total revenues recognized over time | 4,693 | 3,637 |
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 recognized $1,594 thousand in royalty income over time during the year 2022. This figure represents the total royalties collected from all Ben Jerrys franchise locations for that year. Royalty income is a crucial revenue stream for Ben Jerrys, as it reflects the ongoing success and sales performance of its franchise network.
For a prospective franchisee, this number provides insight into the financial health and stability of the Ben Jerrys franchise system. A higher royalty income generally indicates a strong and profitable franchise network. It's important to note that this figure is in thousands, so the actual amount is $1,594,000. This income is generated from franchisees who pay a percentage of their gross sales to Ben Jerrys in exchange for the continued use of the brand name, operational support, and access to the Ben Jerrys system.
Understanding the royalty income trend over several years can give potential franchisees a clearer picture of the brand's performance. While the 2022 royalty income was $1,594,000, the 2023 royalty income increased to $2,603,000. This increase could indicate growth within the franchise system, which may be an encouraging sign for new franchisees. It is important for potential franchisees to investigate the factors that contributed to this change and consider whether similar growth can be expected in the future.
It is also important to consider how Ben Jerrys recognizes revenue. The FDD states that the company's primary performance obligation related to revenue arising from Franchisees is granting certain rights to use the Company's intellectual property. 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. This means that Ben Jerrys recognizes royalty revenue over the life of the franchise agreement.