What was the revenue from other sources for Bens Soft Pretzels for the year ended December 31, 2024?
Bens_Soft_Pretzels Franchise · 2025 FDDAnswer from 2025 FDD Document
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December 31, 2024, 2023, and 2022
NOTE 2 – REVENUE RECOGNITION (CONTINUED)
Revenue recognition (continued)
Other Income – This category of income includes rebates from beverage vendors, design fees, additional training fees, management fees, and registration fees and sponsorships for the owners' convention. Income is recognized based on when the services are provided at an amount expected to be received in exchange for these services. In 2024, the Company signed a 5-year beverage sales and promotion agreement with a beverage provider which includes a rebate based on gallons/cases purchased. The rebate revenue is recognized when it is earned, based on the purchase of the products covered under this agreement. The contract also provided an initial rebate incentive of $15,000 which was rec
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 46)
What This Means (2025 FDD)
According to the 2025 FDD, Bens Soft Pretzels recognizes revenue from several sources, including initial franchise fees, royalty fees, advertising fund fees, and other income. The "other income" category includes rebates from beverage vendors, design fees, additional training fees, management fees, and registration fees and sponsorships for the owners' convention. This income is recognized when the services are provided.
In 2024, Bens Soft Pretzels signed a 5-year beverage sales and promotion agreement with a beverage provider, which included a rebate based on gallons/cases purchased. The rebate revenue is recognized when earned, based on the purchase of products covered under the agreement. The contract also provided an initial rebate incentive of $15,000, which was received in 2024. However, only a portion of this incentive ($3,000 per year) is recognized annually over the 5-year period. As of December 31, 2024, $12,000 of the initial rebate incentive has been deferred to future years.
For a prospective franchisee, understanding the composition of "other income" is important as it reflects additional revenue streams for Bens Soft Pretzels beyond the standard franchise and advertising fees. The beverage agreement, for example, demonstrates how Bens Soft Pretzels seeks to increase revenue through strategic partnerships. The deferred revenue aspect of the initial rebate incentive also highlights the importance of understanding the timing of revenue recognition, as not all cash received is immediately recognized as income.