How does the company account for advertising costs related to Carbones Pizzeria?
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 ex
Source: Item 22 — CONTRACTS (FDD page 30)
What This Means (2025 FDD)
According to the 2025 FDD, Carbones Pizzeria franchisees contribute royalties to an advertising fund, which is intended to maximize public recognition of the brand. The company expenses advertising costs as they are incurred.
For the year ended October 31, 2024, advertising expenses, which are included in sales and marketing expenses, totaled $237,855. In the previous year, for the year ended October 31, 2023, these expenses amounted to $278,545.
This means that franchisees are contributing to a fund that Carbones Pizzeria uses for advertising, and these costs are recognized as expenses in the accounting period they happen. Prospective franchisees should consider these advertising expenses when evaluating the overall financial performance of the company and the potential benefits of the advertising fund.