On what basis are Better Blend royalties calculated?
Better_Blend Franchise · 2024 FDDAnswer from 2024 FDD Document
The Company's revenue consists of fees from franchised restaurants operated by conventional franchisees. Revenue from conventional franchised restaurants include initial franchise fees, royalties based on percent of sales, marketing fees based on percent of sales, and development fees for locations the franchisee opens in addition to the initial location.
Royalties are collected on a weekly basis and are based on certain percentage as specified on the franchise agreement. Marketing fees are based on up to 1% of gross revenue. The marketing fund is used for marketing expenses related to maximizing public recognition of the Company's brand and marketing fund.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 43)
What This Means (2024 FDD)
According to Better Blend's 2024 Franchise Disclosure Document, royalties are based on a percentage of sales, with the specific percentage detailed in the franchise agreement. These royalties are collected weekly.
In addition to royalties, Better Blend franchisees also pay marketing fees, which are up to 1% of gross revenue. These marketing fees are earmarked for marketing expenses aimed at enhancing public recognition of the Better Blend brand.
Prospective franchisees should carefully review the franchise agreement to understand the exact percentage used for royalty calculations. Understanding how these royalties and marketing fees are calculated is crucial for projecting expenses and profitability. Franchisees should also inquire about how the marketing funds are managed and utilized to ensure they align with their business goals.