Is Better Blend allowed to impose a markup for administering a payment program to vendors?
Better_Blend Franchise · 2024 FDDAnswer from 2024 FDD Document
he Business. Franchisee must meet or exceed any minimum score requirements set by BBF for such programs. BBF may set minimum scores that Franchisee must receive from the public on internet review sites (such as Yelp or Google).
- 7.10 Payment Systems. Franchisee shall accept payment from customers in any form or manner designated by BBF (which may include, for example, cash, specific credit and/or debit cards, gift cards, electronic fund transfer systems, and mobile payment systems). Franchisee shall purchase or lease all equipment and enter into all business relationships necessary to accept payments as required by BBF.
Source: Item 22 — CONTRACTS (FDD page 43)
What This Means (2024 FDD)
Based on the 2024 Better Blend Franchise Disclosure Document, the franchise agreement outlines payment procedures but does not explicitly address whether Better Blend Franchising, LLC (BBF) can impose a markup for administering a payment program to vendors. Section 7.10 discusses payment systems, stating that franchisees must accept payment from customers in any form designated by BBF and must acquire the necessary equipment and business relationships to facilitate these payments. This section focuses on customer payments to the franchisee, not payments from the franchisee to vendors.
Section 7.16 states that franchisees are obligated to pay all vendors and suppliers in a timely manner, but it does not specify the methods of payment or whether BBF can administer these payments. The agreement also defines 'Approved Vendor' as a supplier approved by BBF, implying BBF has some influence over vendor selection. However, the agreement remains silent on whether BBF can mandate a payment program administered by them for the vendors, potentially with a markup.
Therefore, a prospective Better Blend franchisee should seek clarification from the franchisor regarding whether BBF has the right to implement a payment program for vendors and whether such a program would involve any markups or fees charged to the franchisee. Understanding these potential costs is crucial for assessing the overall financial viability of the franchise.