What was the total revenue recognized at a point in time for Bens Soft Pretzels?
Bens_Soft_Pretzels Franchise · 2025 FDDAnswer from 2025 FDD Document
2024, 2023, and 2022
NOTE 2 – REVENUE RECOGNITION (CONTINUED)
Disaggregation of revenue from contracts with customers (continued)
| Franchise | Royalty | Advertising | Other | _ | |
|---|---|---|---|---|---|
| Fees | Fees | Fund Fees | Income | Total | |
| Revenue from contracts with customers | $ 147,358 | $ 1,064,701 | $ 232,493 | $ 18,418 | $ 1,462,970 |
| Revenue from other sources | - | - | - | 49,588 | 49,588 |
| $ 147,358 | $ 1,064,701 | $ 232,493 | $ 68,006 | $ 1,512,558 | |
| Franchise | Royalty | Advertising | Other | ||
| Fees | Fees | Fund Fees | Income | Total | |
| Revenue recogni |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 46)
What This Means (2025 FDD)
According to the 2025 FDD, Bens Soft Pretzels recognized $1,315,612 in revenue at a point in time. This total is derived from $1,064,701 in royalty fees, $232,493 in advertising fund fees, and $18,418 in other income.
For a prospective franchisee, this indicates the revenue Bens Soft Pretzels earns from ongoing operations like royalties and advertising, as these are tied to the performance of the franchise locations. Royalty and advertising fees are collected weekly from the bakeries, and a receivable is recorded at year end for amounts earned but not yet received.
Initial franchise fees, on the other hand, are recognized over time, specifically over the term of the franchise agreement. This means that while Bens Soft Pretzels receives an initial payment from franchisees, they do not recognize the entire amount as revenue immediately. Instead, they spread the recognition of this revenue over the life of the franchise agreement. This accounting practice is common in franchising, as the initial fee often covers services and rights provided throughout the franchise term.