Baskin Robbins 2013 Annual Report Download - page 76

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(y) Reclassifications
The Company has revised the presentation of certain captions for prior periods within the consolidated statements of cash flows
to conform to the current period presentation. The revisions had no impact on net cash provided by (used in) operating,
investing, or financing activities.
(z) Subsequent events
Subsequent events have been evaluated up through the date that these consolidated financial statements were filed.
(3) Franchise fees and royalty income
Franchise fees and royalty income consisted of the following (in thousands):
Fiscal year ended
December 28,
2013
December 29,
2012
December 31,
2011
Royalty income $ 411,428 385,713 363,458
Initial franchise fees and renewal income 42,548 33,227 35,016
Total franchise fees and royalty income $ 453,976 418,940 398,474
The changes in franchised and company-owned points of distribution were as follows:
Fiscal year ended
December 28,
2013
December 29,
2012
December 31,
2011
Systemwide points of distribution:
Franchised points of distribution in operation—beginning of year 17,333 16,565 16,105
Franchises opened 1,388 1,470 1,403
Franchises closed (600)(701)(944)
Net transfers from (to) company-owned points of distribution 1(1)1
Franchised points of distribution in operation—end of year 18,122 17,333 16,565
Company-owned points of distribution—end of year 36 35 31
Total systemwide points of distribution—end of year 18,158 17,368 16,596
During fiscal year 2013, the Company performed an internal review of international franchised points of distribution, and
determined that certain franchises opened and closed had not been accurately reported in prior years. As such, the points of
distribution information for fiscal years 2012 and 2011 above have been adjusted to reflect the results of this internal review.
The adjustments to the prior years were not material, and had no impact on the Company's financial position or results of
operations. Franchised points of distribution in operation—beginning of year were reduced by 198 and 57 for fiscal years 2012
and 2011, respectively. Franchised points of distribution in operation—end of year were reduced by 91 and 198 for fiscal years
2012 and 2011, respectively.
(4) Advertising funds
On behalf of certain Dunkin’ Donuts and Baskin-Robbins advertising funds, the Company collects a percentage, which is
generally 5%, of gross retail sales from Dunkin’ Donuts and Baskin-Robbins franchisees to be used for various forms of
advertising for each brand. In most of our international markets, franchisees manage their own advertising expenditures, which
are not included in the advertising fund results.
The Company administers and directs the development of all advertising and promotion programs in the advertising funds for
which it collects advertising fees, in accordance with the provisions of our franchise agreements. The Company acts as, in
substance, an agent with regard to these advertising contributions. We consolidate and report all assets and liabilities held by
these advertising funds as restricted assets of advertising funds and liabilities of advertising funds within current assets and
current liabilities, respectively, in the consolidated balance sheets. The assets and liabilities held by these advertising funds
consist primarily of receivables, accrued expenses, other liabilities, and any cumulative surplus or deficit related specifically to
the advertising funds. The revenues, expenses, and cash flows of the advertising funds are not included in the Company’s
consolidated statements of operations or consolidated statements of cash flows because the Company does not have complete
discretion over the usage of the funds. Contributions to these advertising funds are restricted to advertising, product