What does 'Sales' mean in the context of the Better Blend financial performance representation?
Better_Blend Franchise · 2024 FDDAnswer from 2024 FDD Document
are mostly students and employees from the University.
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- "Sales" means the total revenue derived from the sale of goods or services, before discounts. It does not include sales taxes. It does not include sales of gift cards (but does include redemption of gift cards). It does not include gratuities collected on behalf of employees.
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- "Cost of Goods Sold" means to direct costs of producing the goods sold, i.e., food, beverage, and other inventory items.
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- "Labor" means store employee compensation. It does not include compensation for our owners or the district manager.
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- "Gross Rent" means base rent plus other costs (such as common area maintenance) paid to the landlord of the store premises.
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- "Other" includes various other expenses, such as bank charges, business insurance, repairs and maintenance, payroll taxes, software, and utilities. It includes a flat amount of $9,000 per store for marketing, as an allocation of a portion of the company-wide marketing. It includes only unit-level costs and does not include corporate overhead such as legal and accounting fees.
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- "Net Profit" is Sales less expenses shown above. It does not include interest, taxes, depreciation, or amortization.
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- "Royalty Fee" and "Marketing Fund" are the fees these locations would have paid if they had been franchised.
**Some outlets have sold and earned these amounts. Your individual results may differ
Source: Item 19 — FINANCIAL PERFORMANCE REPRESENTATIONS (FDD pages 38–40)
What This Means (2024 FDD)
According to Better Blend's 2024 Franchise Disclosure Document, the term 'Sales' within the financial performance representation refers to the total revenue a location generates from selling goods and services. This figure is calculated before any discounts are applied. However, it specifically excludes sales taxes, the initial sale of gift cards, and gratuities collected for employees. It does include revenue from the redemption of gift cards.
For a prospective Better Blend franchisee, understanding this definition is crucial for accurately interpreting the financial performance data presented in Item 19 of the FDD. When reviewing the financial performance of affiliate-operated Better Blend locations, it's important to recognize that the 'Sales' figures represent the top-line revenue from core business activities, without including items like sales tax or initial gift card sales that might otherwise inflate the number.
This definition provides clarity and ensures that franchisees are evaluating the revenue generated directly from Better Blend's primary offerings. By excluding items like sales tax and gratuities, the 'Sales' figure offers a more precise view of the store's actual earnings from its products and services. This allows potential franchisees to assess the true revenue-generating capability of the Better Blend business model.
It is important to note that the FDD clearly states, "Some outlets have sold and earned these amounts. Your individual results may differ. There is no assurance that you'll sell or earn as much."