Does Bang Cookies currently receive revenue from suppliers based on franchisee purchases of source restricted products or services?
Bang_Cookies Franchise · 2024 FDDAnswer from 2024 FDD Document
We and/or our affiliates may receive rebates, payments and other material benefits from suppliers based on your purchases and we reserve the right to institute and expand rebate programs in the future. As of the Issuance Date of this Disclosure Document we have not received revenue from suppliers from franchisee purchases of source restricted products or services. We do not provide our franchisees with any material benefits based on a franchisee's purchase of particular products or services or use of particular suppliers. We reserve the right to require you to purchase or lease certain items from us or our affiliates. In the event that we do so, we further reserve the right to include a reasonable markup in the price of the products and services we require you to purchase from us or our affiliates.
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 24–28)
What This Means (2024 FDD)
According to Bang Cookies's 2024 Franchise Disclosure Document, as of the issuance date of the document, Bang Cookies does not receive revenue from suppliers based on franchisee purchases of source restricted products or services. However, Bang Cookies retains the right to institute and expand rebate programs in the future, which could change this arrangement.
Bang Cookies also reserves the right to require franchisees to purchase or lease certain items from them or their affiliates, and in such cases, they reserve the right to include a reasonable markup in the price of these products and services. This means that while Bang Cookies doesn't currently benefit from supplier rebates, they could potentially profit directly from sales to franchisees in the future.
It is common in franchising for franchisors to receive benefits from suppliers based on franchisee purchases, as this can create an additional revenue stream for the franchisor. However, it is also important for prospective franchisees to understand the extent to which they are required to purchase from approved suppliers and whether the franchisor benefits financially from these arrangements, as this can impact the franchisee's costs and profitability.