ROI Guarantee Clause Samples
An ROI Guarantee clause ensures that a specified return on investment (ROI) will be achieved by the party receiving a product or service. Typically, this clause outlines the minimum financial or performance outcomes expected within a set timeframe, and may include provisions for refunds, additional services, or other remedies if the promised ROI is not met. Its core practical function is to allocate risk and provide assurance to the buyer, fostering confidence in the investment and holding the provider accountable for delivering measurable results.
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ROI Guarantee a. Hinge Health guarantees a 1.5:1 ROI to Sponsor for the Chronic Program during the Guarantee Period. Cost savings are assessed based on the reduction of pain as measured by the visual analog scale (“VAS”), before and after participating in the Hinge Health intensive 12-week phase of the Chronic Program. The guarantee period shall be represented as a guarantee effective for a twelve (12) month period from June 1, 2021 through May 31, 2022 (the “Guarantee Period”).
b. To achieve a 1.5:1 ROI, the following calculated value needs to equal one and a half times the cost of the Program: [((Pain at screening) - (Pain at 12 weeks) / (Pain at screening)) x 100] x $71.09* x number of participants = total cost saved *Based on Hinge Health’s published clinical studies, Hinge Health saves $71.09 in MSK costs per Participant per year for every 1 percent decrease in pain. Example: By way of example, assume 300 Participants go through the Program at a total cost of $298,500 (300 participants multiplied by $995). If the average pain reduction is 12% per Participant, then the total Program savings would equal $255,924 (12 x $71.09 x 300). Thus, the Program did not achieve the guaranteed ROI of 1.5:1.
c. If Hinge Health does not achieve a 1.5:1 ROI according to the metric above, Sponsor will receive a prorated refund. Program performance will be assessed, and any required refunds issued at the end of the Guarantee Period for Participants that completed the core 12-week Chronic Program during the Guarantee Period. At the end of each 12-month period, starting on the Effective Date, for Participants that completed the core 12-week Chronic Program during the preceding 12 months. Example: By way of example, based on the scenario described in Section 6(b) of this Addendum, the formula set forth would yield Sponsor a refund of [($447,750 - $255,924)/$447,750]*$298,500 = $127,884.
d. The ROI guarantee set forth in this section is in lieu of any savings or performance guarantee set forth in the Agreement, but only with respect to the Hinge Health Program and Services.