Is the technology fee charged by Better Blend necessarily a pass-through of the company's exact costs?
Better_Blend Franchise · 2024 FDDAnswer from 2024 FDD Document
| Type of Fee | Amount | Due Date | Remarks |
|---|---|---|---|
| 6% of your adjusted | Weekly, on | See Notes 1, 2 and 3. | |
| gross sales | Tuesday | ||
| Currently, 1% of | Weekly, on | We reserve the right to increase the | |
| your adjusted gross | Tuesday | Marketing Fund Contribution to 2% of | |
| sales | your adjusted gross sales. | ||
| As determined by | We have the right to establish local or | ||
| the cooperative. | regional advertising cooperatives. If you | ||
| Currently, none. | are a member of a cooperative, you and | ||
| other members may vote to require each | |||
| member to contribute between 1% and 5% | |||
| of adjusted gross sales to the cooperative. | |||
| We reserve the right to charge a | |||
| commercially reasonable fee for software | |||
| and other technology products and | |||
| services we provide. The technology fee | |||
| will not necessarily be a pass-through of | |||
| our exact costs. We may add, remove, or | |||
| alter the software or technology products | |||
| or services that we provide. The | |||
| technology fee will not exceed $500 per | |||
| month (subject to inflation adjustment). |
Source: Item 6 — OTHER FEES (FDD pages 11–15)
What This Means (2024 FDD)
According to Better Blend's 2024 Franchise Disclosure Document, the technology fee charged to franchisees is not necessarily a direct pass-through of the company's exact costs. Better Blend reserves the right to charge a commercially reasonable fee for software and other technology products and services. This fee will not exceed $500 per month, although this maximum amount is subject to inflation adjustments.
This means that Better Blend has the discretion to set the technology fee at an amount that may or may not directly correspond to their actual expenses for providing the technology. They may include a markup or profit margin in the fee, or they may subsidize the technology costs from other revenue sources.
For a prospective franchisee, this implies that the technology fee could potentially be a source of profit for Better Blend, rather than simply covering costs. It also means that the fee could change over time, up to the $500 monthly limit (adjusted for inflation), as Better Blend adds, removes, or alters the software or technology products or services they provide. Franchisees should inquire about the specific technology products and services covered by the fee and how the fee is determined.