When is the opening considered to take place for a Bens Soft Pretzels location?

According to Bens Soft Pretzels' 2025 Franchise Disclosure Document, the opening of a location is considered to take place when two conditions are met. First, Bens Soft Pretzels must have performed substantially all of the initial services required in the franchise or license agreement. Second, the franchisee or licensee must begin to benefit from the rights included in the franchise or license agreement.

This definition is important because Bens Soft Pretzels recognizes initial franchise fee revenue on a straight-line basis over the initial term of the franchise agreement, starting with the opening of the location. This means that the timing of the opening directly affects when Bens Soft Pretzels starts recognizing revenue from the franchise fee. The franchise agreement in place since June 2018 has an initial term of five years with two possible five-year renewals, for a total of 15 years. Agreements before this had a seven-year initial term and two seven-year renewal options, totaling 21 years.

For a prospective franchisee, this means that the sooner they can begin benefiting from the rights granted in the franchise agreement after Bens Soft Pretzels has fulfilled its initial obligations, the sooner Bens Soft Pretzels will recognize the initial franchise fee revenue. This could have implications for the franchisee if they negotiate payment terms for the franchise fee over a period of time, as a receivable is recorded for the unpaid portion, but revenue recognition still follows the opening date. Bens Soft Pretzels typically requires franchise fees to be paid upon signing the franchise agreement, but sometimes allows payment over time.