Is Bens Soft Pretzels entitled to profits from sales of goods to franchisees?
Bens_Soft_Pretzels Franchise · 2025 FDDAnswer from 2025 FDD Document
We and our affiliates also have the right to offer, sell or distribute any proprietary items or other products or services associated with the System (now or in the future) or identified by the Trademarks, or any other trademarks, service marks or trade names through any distribution channels or methods, without compensation to any franchisee. The distribution channels or methods ("Alternative Methods of Distribution") include, without limitation, grocery stores, club stores, convenience stores, wholesale, business or industry locations (e.g. manufacturing site, office building), military installations, military commissaries or the Internet (or any other existing or future form of electronic commerce).
Source: Item 22 — CONTRACTS (FDD pages 46–47)
What This Means (2025 FDD)
Based on the 2025 Franchise Disclosure Document, it is not clear whether Ben's Soft Pretzels is entitled to profits from the sale of goods to franchisees. The document outlines various aspects of the franchise agreement, including definitions, the grant of license, and addenda for specific states, but it does not explicitly state whether Ben's Soft Pretzels receives profits from the sale of goods to its franchisees.
While the FDD details the franchisee's obligations and the franchisor's rights, such as the right to establish other franchised or company-owned stores and to sell products through alternative distribution channels, it does not specify if the franchisor profits from mandatory purchases franchisees make. The agreement also covers the use of trademarks, website participation, and non-compete covenants, but these sections do not address the franchisor's potential profit from selling goods to franchisees.
A prospective franchisee should seek clarification from Ben's Soft Pretzels regarding whether the franchisor profits from the sale of goods to franchisees. Specifically, they should inquire about the sourcing of ingredients and supplies, whether franchisees are required to purchase these items from the franchisor or approved suppliers, and if the franchisor receives a markup or profit on these sales. Understanding this aspect of the franchise agreement is crucial for assessing the overall profitability and financial obligations of the franchise.