Are the franchisee's payment obligations to Better Blend dependent on Better Blend's performance?
Better_Blend Franchise · 2024 FDDAnswer from 2024 FDD Document
- 7.16 Obligations to Third Parties. Franchisee shall pay all vendors and suppliers in a timely manner.
Franchisee shall pay all taxes when due.
If Franchisee borrows money, it shall comply with the terms of its loan and make all loan payments when due.
If Franchisee leases the Location, Franchisee shall comply with its lease for the Location and make all rent payments when due.
- 11.13 Temporary Management. If (i) the Principal Executive dies or becomes incapacitated, (ii) this Agreement is terminated or expires and BBF elects to purchase assets of the Business as provided in Section 14.6, or (iii) Franchisee is operating the Business in a manner which, in BBF's reasonable opinion, constitutes a danger to the health or safety of any person, then BBF may (but is not obligated to) enter the Location and operate and manage the Business for Franchisee's (or Franchisee's estate's) account until this Agreement is terminated, the Business is transferred, the Business is purchased by BBF, or BBF returns the Business to Franchisee.
BBF may collect a temporary management fee equal to 10% of Adjusted Gross Sales for the period in which BBF operates the Business, plus all expenses
7.10 Payment Systems. Franchisee shall accept payment from customers in any form or manner designated by BBF (which may include, for example, cash, specific credit and/or debit cards, gift cards, electronic fund transfer systems, and mobile payment systems).
7.11 Gift Cards, Loyalty Programs, and Incentive Programs. At its own expense, Franchisee shall sell or otherwise issue gift cards, certificates, or other pre-paid systems, and participate in any customer loyalty programs, membership/subscription programs, or customer incentive programs, designated by BBF, in the manner specified by BBF in the Manual or otherwise in writing.
7.12 Maintenance, Repair, and Alterations. Franchisee shall at all times keep the Business in a neat and clean condition, perform all appropriate maintenance, and keep all of the property of the Business in good repair.
Source: Item 22 — CONTRACTS (FDD page 43)
What This Means (2024 FDD)
Based on the 2024 Franchise Disclosure Document, Better Blend franchisees have payment obligations that are generally independent of Better Blend's overall performance. The franchisee is responsible for managing their own business, including paying vendors, suppliers, and taxes on time, as well as complying with loan and lease terms. These obligations are tied to the franchisee's operation of their specific Better Blend location, not the franchisor's system-wide performance.
Better Blend may temporarily manage a location under certain conditions, such as the death or incapacitation of the Principal Executive, termination or expiration of the Franchise Agreement, or if the franchisee's operation poses a danger to health or safety. In such cases, Better Blend will account to the franchisee for the net income during the management period but may collect a temporary management fee equal to 10% of Adjusted Gross Sales, plus all expenses. This fee structure is tied to the location's performance during the temporary management period, but the franchisee's other obligations remain regardless of Better Blend's actions.
While Better Blend can set minimum performance standards for customer reviews and implement customer loyalty programs, the franchisee's obligation to participate and meet these standards does not directly tie their payments to Better Blend's overall success. The franchisee must maintain the location, accept payment methods designated by Better Blend, and participate in loyalty programs at their own expense. These requirements ensure consistency across the Better Blend system, but the franchisee's financial responsibilities are primarily linked to their own business operations and agreements.