Does Bang Cookies provide franchisees with any material benefits based on a franchisee's purchase of particular products or services or use of particular suppliers?
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, franchisees do not receive any material benefits for purchasing from specific suppliers. However, Bang Cookies and its affiliates may receive rebates, payments, or other benefits from the suppliers based on franchisee purchases, and Bang Cookies reserves the right to implement and expand rebate programs in the future. As of the issuance date of the FDD, Bang Cookies has not received revenue from suppliers based on franchisee purchases of source-restricted products or services.
Bang Cookies restricts franchisees to using only approved or designated suppliers for certain goods and services to maintain quality and system standards. These source-restricted items can represent a significant portion of a franchisee's expenses, estimated at approximately 80% of the initial investment and 60% of ongoing operating expenses. These restricted goods and services include system supplies, branded furniture and fixtures, signage, point-of-sale systems, computer equipment, credit card processing, and online ordering systems.
Franchisees can request approval for alternative suppliers, but Bang Cookies may charge a fee to evaluate the proposed supplier. The approval process can take up to 60 days after Bang Cookies receives all required information and samples. Bang Cookies's criteria for approving suppliers are not fully disclosed to franchisees but include the supplier's ability to meet Bang Cookies's standards and the overall interests of the Bang Cookies system. While franchisees do not directly benefit from using designated suppliers, Bang Cookies retains the right to negotiate purchase agreements and establish preferred vendor programs, potentially impacting costs and supplier options.