How often are the volume rebates received by Crepe De Licious from vendors?
Crepe_De_Licious Franchise · 2025 FDDAnswer from 2025 FDD Document
- Rebates As agent for the franchisees, the Company's performance obligation is to negotiate pricing with large vendors and approved suppliers of food supplies on a system-wide basis for the franchisees. As consideration for the price negotiation services provided, the Company receives volume-based rebate revenue from these third-party vendors. These volume rebates are associated with the quantity of franchisee purchases of materials and supplies under the negotiated pricing levels. Revenue from these rebates is recognized at a point in time as the rebates are earned from the vendors based on purchases made by franchisees. The rebates are received from the vendors quarterly.
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, acting as an agent for franchisees, negotiates pricing with vendors and suppliers for food and supplies on a system-wide basis. In return for these negotiation services, Crepe De Licious receives volume-based rebates from these vendors. These rebates are directly linked to the quantity of materials and supplies franchisees purchase under the negotiated pricing agreements.
The revenue generated from these rebates is recognized when Crepe De Licious earns them from the vendors, based on the purchases made by franchisees. The key detail for prospective franchisees is that Crepe De Licious receives these rebates from the vendors on a quarterly basis. This means that the financial benefits of these negotiated prices and subsequent rebates are realized by Crepe De Licious four times per year.
This arrangement is designed to benefit franchisees by leveraging the collective buying power of the entire Crepe De Licious system to secure better pricing. The rebates received by Crepe De Licious are an indicator of the volume of purchases made by franchisees and contribute to the company's revenue stream as compensation for its negotiation efforts. Franchisees should inquire about how these rebates are factored into the overall cost of goods and how they ultimately benefit the individual franchise unit's profitability.