For Better Blend, are sales of prepaid cards included in Adjusted Gross Sales?
Better_Blend Franchise · 2024 FDDAnswer from 2024 FDD Document
- "Adjusted Gross Sales" means the total dollar amount of all sales generated through the Business for a given period, including, but not limited to, payment for any services or products sold by Franchisee, whether for cash or credit, and any proceeds of business interruption insurance. Adjusted Gross Sales does not include (i) coupons, discounts, and bona fide refunds to customers, (ii) sales taxes collected by Franchisee, or (iii) sales of prepaid cards or similar products (but the redemption of any such card or product will be included in Adjusted Gross Sales). Service gratuities directed by customers to employees are not counted towards Adjusted Gross Sales.
Source: Item 22 — CONTRACTS (FDD page 43)
What This Means (2024 FDD)
According to the 2024 Better Blend Franchise Disclosure Document, the initial sale of prepaid cards is not included in Adjusted Gross Sales. However, the redemption of these prepaid cards is included in Adjusted Gross Sales. Adjusted Gross Sales is a key figure because it is used to calculate royalty fees and other payments to Better Blend.
Adjusted Gross Sales for Better Blend is defined as the total dollar amount of all sales generated through the Business for a given period. This includes payment for any services or products sold by the franchisee, whether for cash or credit, and any proceeds of business interruption insurance.
However, Adjusted Gross Sales specifically excludes (i) coupons, discounts, and bona fide refunds to customers, (ii) sales taxes collected by Franchisee, or (iii) sales of prepaid cards or similar products. The exclusion of prepaid card sales from Adjusted Gross Sales until redemption can impact the timing of revenue recognition for franchisees and the calculation of royalties owed to Better Blend.