Are Better Blend royalties collected monthly?
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 not collected monthly. Instead, Better Blend collects royalties on a weekly basis. These royalties are a percentage of sales, as specified in the franchise agreement.
This weekly collection schedule means that Better Blend franchisees must ensure they have sufficient cash flow to meet this obligation each week. This contrasts with the monthly royalty collection that is common in many franchise systems.
Prospective franchisees should carefully review the franchise agreement to understand the specific percentage of sales required for royalty payments. Understanding the percentage is vital for accurate financial forecasting and budgeting.