Where are advertising expenses included in Carbones Pizzeria's financial statements?
Carbones_Pizzeria Franchise · 2025 FDDAnswer from 2025 FDD Document
, 2024.
Company Restaurant Sales
The Company earns revenue from sales at the Company owned restaurant and is recognized at the time of sale.
Advertising
In accordance with signed franchise agreements, franchisees contribute royalties to an advertising fund. The fund is to be used to maximize public recognition of Carbone's Pizzeria. The Company expenses advertising costs as incurred. Advertising expenses are included in sales and marketing expenses for the years ended October 31, 2024 amounted to $237,855.
Income Taxes
The Company accounts for income taxes under asset and liability method.
Source: Item 22 — CONTRACTS (FDD page 30)
What This Means (2025 FDD)
According to Carbones Pizzeria's 2025 Franchise Disclosure Document, advertising expenses are included in sales and marketing expenses. For the year ended October 31, 2023, these expenses amounted to $278,545. For the year ended October 31, 2024, advertising expenses totaled $237,855.
This means that when reviewing Carbones Pizzeria's financial statements, prospective franchisees should look under the 'sales and marketing expenses' category to find the details of advertising expenditures. This provides transparency into how Carbones Pizzeria is allocating funds for marketing and promotional activities.
It is important to note that franchisees contribute royalties to an advertising fund, which is intended to enhance public recognition of the Carbones Pizzeria brand. The company then expenses these advertising costs as they are incurred. Understanding the amount spent on advertising can help a franchisee assess the franchisor's commitment to brand promotion and its potential impact on their business.