The Situation
A multi-unit restaurant group operates 28 locations across Texas, ordering food products, packaging, and supplies from a national foodservice distributor three times per week per location. The agreement includes volume-based rebates, quarterly purchase incentives, early payment discounts, and a product substitution credit clause. With hundreds of weekly invoices across 28 locations, nobody was tracking whether volume thresholds were being hit or whether unapproved product substitutions were being credited.
Value-Claiming Clauses
Section 3.4
Annual Volume Rebate
Tiered rebate: 2% on annual purchases over $2M, 3% over $2.5M. Calculated within 60 days of year-end.
Section 3.5
Quarterly Purchase Incentive
$15,000 bonus for any quarter with purchases exceeding $600,000.
Section 3.3
Early Payment Discount
1.5% discount on invoices paid within 7 days.
Section 3.6
Product Substitution Credit
5% credit on affected line items for any substitution delivered without prior written approval.
What the Analysis Found
261 weekly invoices spanning the full year were analyzed. Spend was aggregated by quarter to evaluate incentive thresholds, and early-paid invoices were flagged where the discount was available but not applied.
Annual Volume Rebate (2% tier)
Total annual spend of $2.35M qualified for the 2% tier.
$46,974
Quarterly Purchase Incentive
Q2 ($610K) and Q4 ($625K) both exceeded the $600K threshold.
$30,000
Product Substitution Credits
Eight deliveries contained unapproved substitutions with no credit applied.
$4,380
Early Payment Discounts Not Taken
Twelve invoices paid within 7 days without the 1.5% discount.
$5,290
Total Uncaptured Value
$86,644