Is Better Blend required to provide franchisees with an accounting of payments received from designated suppliers?

According to Better Blend's 2024 Franchise Disclosure Document, Better Blend is not required to provide franchisees with an accounting of any payments it receives from designated suppliers. The FDD also states that Better Blend is not required to share any benefits of supplier payments with franchisees. This means that Better Blend has the right to earn a profit from any product it supplies or from designated suppliers without having to disclose these earnings or share them with its franchisees.

This policy is important for prospective franchisees to understand, as it means Better Blend could potentially receive revenue from suppliers based on franchisee purchases, without the franchisee being aware of the amount. While Better Blend does not currently receive payments from designated suppliers, the franchise agreement does not prohibit them from doing so in the future.

It is common in franchising for franchisors to receive payments from designated suppliers, as these arrangements can provide additional revenue streams for the franchisor. However, the lack of transparency regarding these payments can be a point of concern for franchisees, as it may create a conflict of interest if the franchisor is incentivized to choose suppliers that provide the highest payments to the franchisor, rather than those that offer the best value to the franchisee. Prospective Better Blend franchisees should consider this aspect of the franchise agreement and discuss it with the franchisor to fully understand the potential implications.