For an All States M.E.D. franchise, what is the estimated percentage of initial expenditures that will NOT be for goods and services purchased from All States M.E.D., an affiliate, an approved supplier, or another party according to All States M.E.D.'s standards and specifications?
All_States_M_E_D Franchise · 2024 FDDAnswer from 2024 FDD Document
We estimate that approximately 70% of your expenditures for leases and purchases in establishing your Franchised Business will be for goods and services that must be purchased from us, an Affiliate, an approved supplier, or from another party according to our standards and specifications. We estimate that approximately 30% of your expenditures on an ongoing basis will be for goods and services that must be purchased either from us, an Affiliate, an approved supplier or another party according to our standards and specifications.
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 18–21)
What This Means (2024 FDD)
According to All States M.E.D.'s 2024 Franchise Disclosure Document, approximately 70% of a new franchisee's initial expenditures will be for goods and services that must be purchased from All States M.E.D., an affiliate, an approved supplier, or another party according to their standards and specifications. This leaves an estimated 30% of initial expenditures that are not required to be purchased from these specified sources.
This means a prospective All States M.E.D. franchisee has some flexibility in sourcing goods and services for a portion of their initial setup. However, it's important to note that All States M.E.D. maintains standards and specifications that must be met, even when purchasing from alternative suppliers. This could involve leasehold improvements, where franchisees can choose their supplier but must adhere to All States M.E.D.'s build-out specifications.
While franchisees have some freedom in selecting suppliers for 30% of their initial expenditures, All States M.E.D. retains control over supplier approval. If a franchisee wishes to use an alternative supplier, All States M.E.D. can charge up to $1,000 to test the proposed supplier. All States M.E.D. will assess the quality of items, the supplier's capacity, and customer service to determine whether to add them to the approved vendor list. This process ensures that even with the flexibility to choose some suppliers, All States M.E.D. maintains quality control and brand consistency.
Prospective franchisees should carefully consider these restrictions and the approval process for alternative suppliers. Understanding the specific items that fall into the 30% category and the criteria for supplier approval is crucial for managing initial costs and maintaining compliance with All States M.E.D.'s standards.