If Baya Bar develops confidential proprietary recipes, are franchisees required to use them?
Baya_Bar Franchise · 2024 FDDAnswer from 2024 FDD Document
We and our affiliates have and may continue to develop for use in the System certain products which are prepared from confidential proprietary recipes and other proprietary products which bear the Marks. Because of the importance of quality and uniformity of production and the significance of those products in the System, it is to your and our benefit that we closely control the production and distribution of those products. You will use only our proprietary recipes and other proprietary products and will purchase all your inventory of these proprietary products only from us, our affiliates, or the suppliers we designate. 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.
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, franchisees are required to use the company's confidential proprietary recipes. Baya Bar states that it and its affiliates may continue to develop certain products for use in the system that are prepared from confidential proprietary recipes and other proprietary products that bear the marks. Because of the importance of quality and uniformity of production and the significance of those products in the system, it is to the franchisee's and Baya Bar's benefit that they closely control the production and distribution of those products.
As a Baya Bar franchisee, you must use only Baya Bar's proprietary recipes and other proprietary products and will purchase all inventory of these proprietary products only from Baya Bar, its affiliates, or the suppliers they designate. Baya Bar has the right to earn a profit from the sale of these proprietary products or proprietary recipes to its franchisees or from the use of these recipes by its franchisees. For proprietary acai, pitaya, and coconut blends, franchisees must use Baya Bar's designated supplier, Happy Fruit, located at 305 East 1st Avenue, Roselle, New Jersey, 07203.
For the fiscal year ended December 31, 2023, Baya Bar did not earn revenue from the sale of its proprietary acai, pitaya, and coconut blends to franchisees. This indicates that while franchisees are required to purchase from designated suppliers, Baya Bar's revenue from these specific products was not yet a significant factor in that year. This may change in the future as the brand and its supply chain mature. Prospective franchisees should consider these requirements and potential costs when evaluating the Baya Bar franchise opportunity.