Does Better Blend have the right to collect payments from Better Blend franchisees on behalf of a vendor?
Better_Blend Franchise · 2024 FDDAnswer from 2024 FDD Document
If (i) the Principal Executive dies or becomes incapacitated, (ii) this Agreement is terminated or expires and BBF elects to purchase assets of the Business as provided in Section 14.6, or (iii) Franchisee is operating the Business in a manner which, in BBF's reasonable opinion, constitutes a danger to the health or safety of any person, then BBF may (but is not obligated to) enter the Location and operate and manage the Business for Franchisee's (or Franchisee's estate's) account until this Agreement is terminated, the Business is transferred, the Business is purchased by BBF, or BBF returns the Business to Franchisee.
BBF's operation and management will not continue for more than 90 days without Franchisee's consent (or the consent of the representatives of Franchisee's estate).
If this Agreement has not terminated or expired, then BBF will account to Franchisee for all net income from the Business during the period in which BBF operates the Business.
BBF may collect a temporary management fee equal to 10% of Adjusted Gross Sales for the period in which BBF operates the Business, plus all expenses
Source: Item 22 — CONTRACTS (FDD page 43)
What This Means (2024 FDD)
According to the 2024 Better Blend Franchise Disclosure Document, under specific circumstances, Better Blend may have the right to collect payments from franchisees. Specifically, if the Franchise Agreement is terminated or expires, or if Better Blend elects to purchase the assets of the business, or if the franchisee is operating the business in a manner that endangers health or safety, Better Blend has the option to enter the location and manage the business on behalf of the franchisee.
During such a period of temporary management, Better Blend will account to the franchisee for all net income generated by the business. Better Blend is also entitled to collect a temporary management fee. This fee is equal to 10% of Adjusted Gross Sales for the period in which Better Blend operates the Business, in addition to all expenses. Adjusted Gross Sales means the total dollar amount of all sales generated through the Business for a given period, including, but not limited to, payment for any services or products sold by Franchisee, whether for cash or credit, and any proceeds of business interruption insurance.
This arrangement is temporary, lasting no more than 90 days without the franchisee's consent. This provision ensures that Better Blend can maintain the brand's standards and operational integrity during transitional periods or in situations where the franchisee is unable to manage the business effectively. However, the FDD does not explicitly state that Better Blend can collect payments on behalf of a vendor.