Is a Beard Papas franchisee required to join any purchasing or distribution cooperatives?
Beard_Papas Franchise · 2025 FDDAnswer from 2025 FDD Document
Purchase Agreements and Cooperatives
We may, in our discretion, negotiate purchase agreements, including price terms, with designated suppliers for source restricted goods and services on behalf of the System. We may establish preferred vendor programs with suppliers on behalf of some or all of the Shops under the System. We may limit the number of approved vendors and/or suppliers that you may purchase from and we may designate one vendor as your sole supplier. Presently, there are no purchase or supply agreements in effect for source restricted products or services and there are no purchasing or distribution cooperatives that you must join. You will not receive any material benefits for using our designated or approved suppliers.
Our Right to Receive Compensation and Our Revenue from Source Restricted Purchases
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. During the fiscal year ending December 31, 2024, we earned $459,862.40 in rebates from franchisee purchases. This represents 19.6% of our total revenue of $2,348,295.
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 26–29)
What This Means (2025 FDD)
According to Beard Papas's 2025 Franchise Disclosure Document, franchisees are not currently required to join any purchasing or distribution cooperatives. The FDD specifies that while Beard Papas may negotiate purchase agreements with suppliers and establish preferred vendor programs, there are currently no mandatory purchasing or distribution cooperatives. This provides franchisees with some flexibility in sourcing goods and services, although Beard Papas does retain the right to implement such requirements in the future.
Beard Papas may limit the number of approved vendors and even designate a single vendor as the sole supplier for certain items. While there are no mandatory cooperatives, franchisees are still required to purchase certain goods and services from approved or designated suppliers. This includes system supplies, branded furniture, fixtures, equipment, signage, and the point-of-sale system.
Although franchisees are not required to participate in purchasing cooperatives, Beard Papas does receive rebates from suppliers based on franchisee purchases. In the fiscal year ending December 31, 2024, Beard Papas earned $459,862.40 in rebates, which represented 19.6% of their total revenue of $2,348,295. However, the FDD states that franchisees do not receive any material benefits based on their purchases from particular suppliers.