Must a Better Blend franchisee comply with system-wide agreements negotiated by BBF with third-party delivery services?
Better_Blend Franchise · 2024 FDDAnswer from 2024 FDD Document
- (d) Method of Sale. Franchisee shall make sales only at the Location or by third-party delivery services as described in subsection (e).
- (e) Delivery Services. 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, franchisees must use third-party delivery services that Better Blend requires or approves. Better Blend retains the right to negotiate system-wide agreements with these third-party delivery services, and franchisees are obligated to comply with any such agreements.
This means that a Better Blend franchisee does not have the freedom to choose their own delivery partners or negotiate individual terms. Instead, they must adhere to the agreements that Better Blend establishes on a system-wide level. This ensures consistency and potentially leverages the franchisor's buying power to secure favorable terms.
The FDD also states that Adjusted Gross Sales on deliveries will be calculated on the amount paid by the customer to the delivery service, excluding any fees charged by the delivery service to the customer in addition to Better Blend prices, such as delivery fees, service charges, or gratuities. This clarifies how revenue from delivery sales is calculated for royalty purposes, ensuring that franchisees are not paying royalties on fees retained by the delivery service.