What was the value of gift cards redeemable at Monicals Pizza as of January 1, 2023?
Monicals_Pizza Franchise · 2025 FDDAnswer from 2025 FDD Document
|-----------------------|-------------------|-------------------|-----------------| | Accounts receivable | $380,798 | $747,232 | $575,199 | | Gift cards redeemable | 845,080 | 785,655 | 732,343 |
PRE-OPENING COSTS:
The Company expenses direct training a
Source: Item 23 — RECEIPTS (FDD pages 46–257)
What This Means (2025 FDD)
According to Monicals Pizza's 2025 Franchise Disclosure Document, the value of gift cards redeemable was $732,343 as of January 1, 2023. This figure represents the total liability Monicals Pizza had for outstanding gift cards that customers could redeem for goods or services at that specific point in time.
For a prospective franchisee, this indicates the scale of gift card usage within the Monicals Pizza system. It demonstrates that a significant amount of sales are conducted using gift cards, which can impact cash flow and revenue recognition. Franchisees need to be aware of how gift card sales and redemptions are accounted for and managed within their individual restaurant operations.
The FDD also mentions that Monicals Pizza administers a gift card program and presents unredeemed gift cards as a liability on the consolidated balance sheets. The liability is reduced by an annual estimated amount of breakage calculated as 6% of total activations over the past five years, which was $35,133 for the year ended December 31, 2024. This breakage calculation accounts for gift cards that are likely to go unredeemed due to loss or abandonment, which is a common practice in the restaurant industry.