If Baya Bar or its affiliates become approved suppliers, can they profit from sales to franchisees?
Baya_Bar Franchise · 2024 FDDAnswer from 2024 FDD Document
Currently neither we nor any affiliate of ours is an approved supplier for any product or service you must purchase or lease, but we may become an approved or designated supplier in the future. If we or an affiliate are an approved or designated supplier, we may earn a profit from the sale of items and services to our franchisees. None of our officers has an ownership interest in any approved supplier, except William Loesch has an ownership interest in Vuda Media S Corp.
We have the right to earn a profit from the sale of these proprietary products or proprietary recipes to our franchisees or from the use of these recipes by our franchisees. For our proprietary acai, pitaya and coconut blends, you must use our designated supplier, Happy Fruit, located at 305 East 1st Avenue, Roselle, New Jersey, 07203. During the fiscal year ended December 31, 2023, we did not earn revenue from the sale of our proprietary acai, pitaya, and coconut blends to franchisees.
We have the right to collect and retain any and all allowances, rebates, credits, incentives, or benefits (collectively, "Allowances") offered by manufacturers, suppliers, and distributors to you, to us, or to our affiliates based upon your purchases of products and services from manufacturers, suppliers, and distributors. For the fiscal year ended December 31, 2023, we derived $19,447.96 from franchisee-required purchases, which comprised 3% of our total revenue of $746,503.
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 20–24)
What This Means (2024 FDD)
According to Baya Bar's 2024 Franchise Disclosure Document, Baya Bar or its affiliates may profit from sales to franchisees if they become approved or designated suppliers in the future. Currently, neither Baya Bar nor its affiliates are approved suppliers for any product or service that franchisees must purchase or lease. However, this may change, and if it does, Baya Bar retains the right to earn a profit from those sales. William Loesch, an officer of Baya Bar, has an ownership interest in Vuda Media S Corp, which is a designated supplier for web and social media management and branding. Franchisees are required to use Vuda Media S Corp for these services.
Baya Bar also has the right to earn a profit from the sale of proprietary products or recipes to franchisees, or from the use of these recipes by franchisees. Franchisees are required to purchase proprietary acai, pitaya, and coconut blends from Baya Bar's designated supplier, Happy Fruit. During the fiscal year ended December 31, 2023, Baya Bar did not earn revenue from the sale of these proprietary blends to franchisees.
Baya Bar also has the right to collect and retain any allowances, rebates, credits, incentives, or benefits offered by manufacturers, suppliers, and distributors based on franchisee purchases. For the fiscal year ended December 31, 2023, Baya Bar derived $19,447.96 from franchisee-required purchases, which comprised 3% of their total revenue of $746,503. This indicates that while franchisee purchases contribute to Baya Bar's revenue, they are not the sole source of income. Prospective franchisees should consider these potential revenue streams for Baya Bar and how they might affect the overall cost of operating a franchise.