What was the royalty revenue for Better Blend, according to the financial statements?
Better_Blend Franchise · 2024 FDDAnswer from 2024 FDD Document
bligation in the contract, and (v) the Company has satisfied the applicable performance obligation.
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.
Franchise fee revenue was approximately $2,600 for the year ended December 31, 2022. The initial franchise fees collected are determined on a franchisee-by-franchisee basis.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 43)
What This Means (2024 FDD)
According to Better Blend's 2024 Franchise Disclosure Document, the financial statements do not explicitly state the exact royalty revenue amount. However, the document does provide some context regarding how Better Blend recognizes revenue.
The notes to the financial statements explain that Better Blend's revenue consists of fees from franchised restaurants, including initial franchise fees, royalties based on a percentage of sales, marketing fees (up to 1% of gross revenue), and development fees. Royalties are collected weekly, based on a percentage specified in the franchise agreement.
While the FDD mentions that two customers represented 69% of royalties and marketing fees receivable as of December 31, 2023, it does not disclose the total royalty revenue earned by Better Blend. A prospective franchisee should inquire directly with Better Blend about their royalty revenue and request further clarification on the financial performance of existing franchise locations.