What was the royalty revenue for Better Blend in the year ended December 31, 2023?
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.
The initial franchise fees collected are determined on a franchisee-by-franchisee basis. The Company had ten franchisees under contract and four were operational as of December 31, 2023.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 43)
What This Means (2024 FDD)
According to Better Blend's 2024 Franchise Disclosure Document, the company's revenue consists of fees from franchised restaurants operated by conventional franchisees, 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. As of December 31, 2023, Better Blend had ten franchisees under contract, with four locations operational.
The FDD includes an income statement for the year ended December 31, 2023. However, the specific royalty revenue earned by Better Blend during that period is not explicitly stated as a single line item. Instead, the financial statements provide an overview of the company's revenues and expenses, without breaking down the exact amount derived solely from royalties.
Prospective franchisees should inquire directly with Better Blend's management to obtain precise figures for royalty revenue in 2023. Understanding the proportion of revenue derived from royalties versus other fees (such as franchise or development fees) is crucial for assessing the financial stability and revenue model of the franchise. This information will help potential franchisees evaluate the long-term viability and potential return on investment of a Better Blend franchise.