How are Adjusted Gross Sales calculated on deliveries for a Better Blend franchise?
Better_Blend Franchise · 2024 FDDAnswer from 2024 FDD Document
Franchisee shall use such third-party delivery services as BBF may require or approve, and only such third-party delivery services. BBF reserves the right to negotiate system-wide agreements with third-party delivery services, and Franchisee shall comply with any such agreement. BBF reserves the right to set boundaries for delivery, which need not be the same as the Territory. Adjusted Gross Sales on deliveries will be calculated on the amount paid by the customer to the delivery service (not counting any fees charged by the delivery service to the customer in addition to Better Blend prices, such as a delivery fee, service charge, or gratuity charged by the delivery service to the customer), rather than the net amount received by Franchisee from the delivery service.
Source: Item 22 — CONTRACTS (FDD page 43)
What This Means (2024 FDD)
According to Better Blend's 2024 Franchise Disclosure Document, Adjusted Gross Sales on deliveries are calculated based on the amount the customer pays to the delivery service. This calculation does not include any fees the delivery service charges the customer in addition to Better Blend prices, such as delivery fees, service charges, or gratuities. The Adjusted Gross Sales are based on the customer's payment to the delivery service, not the net amount the franchisee receives from the delivery service.
This means that Better Blend franchisees will pay royalties and other fees based on the full customer payment made through third-party delivery services, even if the franchisee does not directly receive that full amount due to delivery service fees. This is a common practice in the franchise industry, as it simplifies the accounting process and ensures that royalties are calculated on the total revenue generated by the business.
Better Blend also retains the right to negotiate system-wide agreements with third-party delivery services, and franchisees must comply with these agreements. Additionally, Better Blend can set delivery boundaries, which may differ from the franchisee's territory. Franchisees should be aware of these factors when evaluating the potential profitability of delivery sales and the overall financial performance of their Better Blend franchise.