What is the Hawaiian Bros Island Grill franchisee's obligation regarding the gift card program?
Hawaiian_Bros_Island_Grill Franchise · 2025 FDDAnswer from 2025 FDD Document
signate or approve.
You must participate in, and comply with the requirements of, any gift card, customer loyalty or retention, SMS/mobile, or special promotional program that we implement for all or part of the System, and sign the forms and take the other action that we require for you to participate in these programs. You may not have any type of competing or conflicting programs at the local or area cooperative level.
Our affiliate, HBGC, manages and administers the gift card program for the System. HBGC contracts with approved suppliers to produce and supply gift cards and to process gift card redemptions and settlements. New franchisees must sign a Gift Card Program Agreement with HBGC, a copy of which is attached as Exhibit J. As part of the gift card settlement process, the amount due to you will be reduced to allow HBGC to recoup the costs, losses, expenses, discounts, rebates and similar incentives extended to third parties that it incurs in the operation of the gift card program. HBGC will periodically (not more than
once annually) determine the amount of such reduction. Currently, the reduction is 12.26% of the amount redeemed for redemption of all gift cards originally activated or sold by third parties. We currently do not reduce settle for the redemption of gift cards originally activated and sold from Restaurants. This reduced settlement process may result in HBGC recovering more or less than its actual losses with respect to any particular period.
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 30–34)
What This Means (2025 FDD)
According to the 2025 Hawaiian Bros Island Grill Franchise Disclosure Document, franchisees are required to participate in any gift card programs that Hawaiian Bros Island Grill implements for the system. This includes signing required forms and taking necessary actions to participate. Franchisees are prohibited from having any competing or conflicting programs at the local or area cooperative level.
HBGC, an affiliate of Hawaiian Bros Island Grill, manages and administers the gift card program, contracting with approved suppliers for gift card production, redemption, and settlement. New franchisees must sign a Gift Card Program Agreement with HBGC. As part of the gift card settlement process, the amount due to the franchisee will be reduced to allow HBGC to recoup costs, losses, expenses, discounts, rebates, and similar incentives extended to third parties in the operation of the gift card program.
The FDD states that the reduction is currently 12.26% of the amount redeemed for redemption of all gift cards originally activated or sold by third parties. Currently, Hawaiian Bros Island Grill does not reduce settle for the redemption of gift cards originally activated and sold from Restaurants. This reduced settlement process may result in HBGC recovering more or less than its actual losses with respect to any particular period. This means that while franchisees must participate in the gift card program, they will also bear a portion of the costs associated with it through reduced settlement amounts.