How is Crepe De Licious compensated for procuring food ingredients for the third-party distributor?
Crepe_De_Licious Franchise · 2025 FDDAnswer from 2025 FDD Document
Commissions for Sale of Food Products As an agent for a third-party food distributor, the Company's performance obligation is to procure food ingredients for the third-party. As consideration for this service, the Company receives a commission from the third-party upon delivery of the product. This commission is recognized at a point in time when the product is delivered to the customer.
Source: Item 23 — RECEIPTS (FDD pages 57–233)
What This Means (2025 FDD)
According to Crepe De Licious's 2025 Franchise Disclosure Document, the company acts as an agent for a third-party food distributor, and its performance obligation involves procuring food ingredients for this distributor. Crepe De Licious receives a commission from the third-party food distributor as consideration for this service.
This commission is recognized at a specific point in time, which is when the product is delivered to the customer. This means that Crepe De Licious earns its commission each time the food ingredients are successfully delivered to the designated recipient.
For a prospective franchisee, this arrangement indicates that Crepe De Licious has established relationships with food distributors and receives compensation for facilitating the supply of ingredients. However, the FDD does not specify the commission rate or how it is calculated. It would be prudent for a potential franchisee to inquire about the typical commission rates and how they might impact the overall cost of goods for their Crepe De Licious franchise.