Does 1 800 Packouts receive revenue from franchisee purchases?
1_800_Packouts Franchise · 2025 FDDAnswer from 2025 FDD Document
lease equipment, inventory, and other items to operate a Franchised Business.
Revenue from Purchases. We or our affiliates may receive revenues or profits or other material consideration from the purchases you make from us, our affiliates, or from other approved suppliers. We intend to earn revenue from your purchase of certain items that we may specify from time to time. We may retain any rebates or other payments we receive from suppliers. Our affiliate, ProNexis, received $47,500 from franchisee purchases during fiscal year 2022.
During our last fiscal year, we did not receive any revenue from the required purchase of products and services by our franchisees. We have not yet established any arrangements with suppliers which would require the supplier to make payments to us based on our purchases, but we reserve the right to do so.
Cooperatives and Purchase Arrangements. We are not involved in any purchasing or distribution cooperatives. We may, but are not obligated to, negotiate purchase arrangements with suppliers for the benefit of franchisees. As of the issuance date of this Disclosure Document, we have negotiated purchase arrangements with suppliers for the benefit of our franchisees for certain packing supplies and vehicles.
Material Benefits. We do not provide any material benefits to franchisees (for example, renewal or granting additional franchises) based upon their purchase of particular products or services or use of particular suppliers.
ITEM 9 FRANCHISEE'S OBLIGATIONS
This table lists your principal obligations under the franchise and other agreements. It will help you find more detailed information about your obligations in these agreements and in other items of this disclosure document.
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 27–29)
What This Means (2025 FDD)
According to 1 800 Packouts's 2025 Franchise Disclosure Document, 1 800 Packouts or its affiliates may receive revenues, profits, or other material consideration from franchisee purchases made from them, their affiliates, or from other approved suppliers. 1 800 Packouts intends to earn revenue from franchisee purchases of certain items that they may specify from time to time and may retain any rebates or other payments they receive from suppliers. During fiscal year 2024, 1 800 Packouts received $77,430.36 from franchisee purchases, representing 1.78% of their total revenue during that period. Their affiliate, ProNexis, received $65,357.06 in revenues during fiscal year 2024 from franchisee purchases. However, during fiscal year 2022 ProNexis received $47,500 from franchisee purchases. During the last fiscal year, 1 800 Packouts did not receive any revenue from the required purchase of products and services by their franchisees.
This means that as a 1 800 Packouts franchisee, you may be required to purchase certain items from 1 800 Packouts, its affiliates, or approved suppliers, which could generate revenue for the franchisor. The percentage of total costs for items that you must purchase from 1 800 Packouts or approved sources ranges from 90% to 100%.
1 800 Packouts retains the right to establish arrangements with suppliers that would require the supplier to make payments to them based on franchisee purchases. 1 800 Packouts may change the specifications or quality standards for required purchases, and these modifications will generally be uniform for all franchisees. They will notify franchisees of any changes to their manuals, specifications, or standards in writing, which they may transmit electronically.
Prospective franchisees should be aware that 1 800 Packouts can modify purchasing requirements and supplier arrangements, potentially impacting the cost and sources of required products and services. It is important to stay informed about any changes to purchasing requirements and supplier arrangements to manage costs and maintain compliance with franchise standards.