How are rebates calculated for Benjamin Franklin Plumbing franchisees?
Benjamin_Franklin_Plumbing Franchise · 2025 FDDAnswer from 2025 FDD Document
Rebates received from third-party vendors in return for the Company maintaining a buying program that connects the vendors with the Company's franchisee and company-owned customers are recognized as revenue and as a reduction of expense, respectively, as they become due, which is generally on a monthly basis. Rebates are calculated as a p
Source: Item 22 — CONTRACTS (FDD pages 87–88)
What This Means (2025 FDD)
According to Benjamin Franklin Plumbing's 2025 Franchise Disclosure Document, rebates are received from third-party vendors in return for Benjamin Franklin Plumbing maintaining a buying program that connects the vendors with both its franchisees and company-owned customers. These rebates are recognized as revenue and a reduction of expense as they become due, which typically happens on a monthly basis. The rebates are calculated as a percentage of third-party sales.
For a prospective Benjamin Franklin Plumbing franchisee, this means that a portion of their revenue may come from rebates earned through the franchisor's negotiated buying program with vendors. The amount of these rebates will depend on the volume of third-party sales generated by the franchisee. This arrangement incentivizes franchisees to participate in the buying program, potentially lowering their expenses and increasing revenue.
The FDD also indicates the company recognized specific amounts in rebates. The company recognized $11,177, $15,723 and $15,906 of rebates in other revenue on the consolidated statements of operations for the years ended December 31, 2024, 2023 and 2022. These figures provide some context as to the scale of rebates Benjamin Franklin Plumbing has received in recent years, although these numbers reflect rebates from both franchise and company-owned operations.