Who bears the expense of a Bombs Away franchisee's participation in gift card and loyalty programs?

According to Bombs Away's 2024 Franchise Disclosure Document, the franchisee is responsible for the expenses associated with gift card and loyalty programs. Specifically, the franchisee must sell or issue gift cards, certificates, or other prepaid systems and participate in any customer loyalty, membership/subscription, or customer incentive programs designated by Bombs Away at their own expense. This includes adhering to the procedures and specifications set forth by Bombs Away related to these programs.

This means that a Bombs Away franchisee will need to budget for the costs of implementing and maintaining these programs. These costs could include purchasing gift cards, setting up the necessary software or systems to track loyalty points, and any marketing or promotional materials related to these programs. The franchisee is also obligated to honor all valid gift cards, regardless of whether they were issued by their specific franchise or another Bombs Away location.

This requirement ensures consistency across the Bombs Away system, as all franchisees must participate in the designated programs. However, it also places a financial burden on the franchisee, who must bear the expenses of these programs. Prospective franchisees should carefully consider these costs when evaluating the financial viability of a Bombs Away franchise and inquire about the typical expenses associated with these programs.

It is common in the franchise industry for franchisees to bear the costs of local marketing and promotional activities, including loyalty programs. However, the specific requirements and costs can vary significantly between franchise systems. Therefore, it is crucial for potential Bombs Away franchisees to fully understand the financial implications of participating in these programs and to factor them into their overall business plan.