What are 'Allowances' as defined in the Beef O Bradys FDD?
Beef_O_Bradys Franchise · 2025 FDDAnswer from 2025 FDD Document
ay be provided through additions to the Confidential Operating Manual.
Allowances. We may collect and retain certain manufacturing allowances, marketing allowances, rebates, credits, monies, payments and benefits (collectively, "Allowances") offered to us or to our affiliates by manufacturers, suppliers and distributors based upon your purchases of products and other goods and services. These Allowances are based on System-wide purchases of food, equipment, supplies, paper goods, merchandise and other items.
Allowances Received. We receive up to $13.12 per case from Sysco in connection with the sale of our wing sauces and dressings. We may also receive rebates based on purchases by Brass Tap Bar purchases of oil, mac and cheese and beer cheese. In the fiscal year ended December 31, 2024, our total revenues were $60,930,678 and we received $1,632,865 or 2.7% in rebates from purchases by Family Sports Pubs and Brass Tap Bars.
In addition to the rebates described above, on occasion we receive payments from other approved suppliers in connection with franchisee purchases, which payments are remitted to the Marketing and Development Fund. During the fiscal year ended December 31, 2024, the Marketing and Development Fund's total income was $6,610,880 and it received $318,72
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES. (FDD pages 22–27)
What This Means (2025 FDD)
According to Beef O Bradys's 2025 Franchise Disclosure Document, 'Allowances' are defined as certain manufacturing allowances, marketing allowances, rebates, credits, monies, payments, and benefits that Beef O Bradys or its affiliates may receive from manufacturers, suppliers, and distributors based on franchisees' purchases of products, goods, and services. These allowances are based on System-wide purchases of items such as food, equipment, supplies, paper goods, and merchandise.
For a prospective Beef O Bradys franchisee, this means that the franchisor may be benefiting financially from the franchisee's purchases through approved suppliers. While the franchisee is required to purchase certain items from specific suppliers, Beef O Bradys may be collecting rebates or other benefits based on the volume of those purchases across the entire franchise system.
The FDD specifies that Beef O Bradys receives up to $13.12 per case from Sysco for wing sauces and dressings. They may also receive rebates from Brass Tap Bar purchases of oil, mac and cheese and beer cheese. In the fiscal year ended December 31, 2024, Beef O Bradys's total revenues were $60,930,678, and they received $1,632,865, or 2.7%, in rebates from purchases by Family Sports Pubs and Brass Tap Bars. Additionally, the Marketing and Development Fund received $318,726, or 4.8% of its total income, in supplier rebates from franchisee purchases during the same period, where the fund's total income was $6,610,880. This indicates that a portion of the money spent by franchisees on required purchases ultimately benefits the franchisor and the Marketing and Development Fund. A franchisee should consider these arrangements when evaluating the overall cost of goods and the financial relationship with Beef O Bradys.