What is included in 'Direct Labor Cost' for a Bee Organized franchise?
Bee_Organized Franchise · 2025 FDDAnswer from 2025 FDD Document
- (g) Direct Labor Cost means the direct non-owner labor expenses incurred in the operations of the Outlet and for employees that directly perform or provide services resulting in Gross Sales and includes wages, payroll taxes, workers' compensation, and paid employee benefits, if any.
Direct Labor Cost does not include compensation related to administrative labor or management labor.
For Franchise Outlets, Direct Labor Cost does not include labor expenses or compensation paid to the franchise owners that perform services on behalf of their Bee Organized Business.
Source: Item 19 — FINANCIAL PERFORMANCE REPRESENTATIONS (FDD pages 40–50)
What This Means (2025 FDD)
According to Bee Organized's 2025 Franchise Disclosure Document, Direct Labor Cost encompasses specific labor-related expenses tied to the operation of a franchise outlet. It includes the wages of employees who directly perform or provide services that generate gross sales.
Specifically, Direct Labor Cost includes wages, payroll taxes, workers' compensation, and paid employee benefits, if any, for non-owner employees who directly contribute to service delivery. This definition is important for franchisees as it helps them understand which labor costs are factored into the Direct Gross Profit calculation.
Notably, Direct Labor Cost does not include compensation for administrative or management labor. Furthermore, for franchise outlets, it excludes any labor expenses or compensation paid to the franchise owners themselves for services they perform on behalf of their Bee Organized business. This distinction is crucial for accurately assessing the profitability of a Bee Organized franchise, as it separates operational labor costs from managerial and owner compensation.