What was the reported value of franchise fees receivable for Bens Soft Pretzels in 2023?
Bens_Soft_Pretzels Franchise · 2025 FDDAnswer from 2025 FDD Document
franchise fee | | (305,555) | | (346,954) | | (300,060) | | (332,002) | | Deferred revenue - related party | | (1,162) | | (698) | | (234) | | - |
December 31, 2024, 2023, and 2022
NOTE 3 – FRANCHISE FEES RECEIVABLE
The Company made arrangements with certain franchise owners for them to pay their initial franchise fee over a period of time. Interest is not being charged on these balances. The current portion of franchise fees receivable, net of the allowance for credit losses of $0, totaled $15,000, $21,000, and $40,000, respectively
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 46)
What This Means (2025 FDD)
According to Bens Soft Pretzels' 2025 Franchise Disclosure Document, the current portion of franchise fees receivable, net of the allowance for credit losses of $0, totaled $21,000 as of December 31, 2023. The non-current portion of franchise fees receivable totaled $0 as of the same date. This indicates that Bens Soft Pretzels had arrangements with certain franchise owners to pay their initial franchise fee over time.
For a prospective franchisee, this means that Bens Soft Pretzels sometimes allows new owners to finance the initial franchise fee rather than requiring it upfront. The FDD specifies that interest is not charged on these payment plans. The receivable is classified as a current asset, implying that the payments are typically expected within a twelve-month period.
It's important to note that while Bens Soft Pretzels extends this payment option, they also assess the creditworthiness of franchisees and maintain an allowance for potential credit losses. However, for 2023, the allowance for credit losses related to franchise fees was $0, suggesting that Bens Soft Pretzels did not anticipate any issues with collecting these receivables at that time.
A potential franchisee should inquire about the specific terms and conditions for these payment arrangements, including eligibility criteria and the typical repayment schedule. Understanding these details is crucial for financial planning and assessing the overall affordability of the Bens Soft Pretzels franchise.