Under what condition is Better Blend not allowed to increase prices of goods provided to the franchisee?
Better_Blend Franchise · 2024 FDDAnswer from 2024 FDD Document
- (6) Allowing for an increase in prices of goods provided by the franchisor which the franchisee had ordered for private retail consumers prior to the franchisee's receipt of an official price increase
notification. A sales contract signed by a private retail consumer shall constitute evidence of each order. Price changes applicable to new models of a product at the time of introduction of such new models shall not be considered a price increase. Price increases caused by conformity to a state or federal law, or the revaluation of the United States dollar in the case of foreign-made goods, are not subject to this subsection (6).
Source: Item 22 — CONTRACTS (FDD page 43)
What This Means (2024 FDD)
According to Better Blend's 2024 Franchise Disclosure Document, specifically the Indiana Rider to the franchise agreement, Better Blend is restricted from increasing prices on goods that a franchisee has already ordered for private retail consumers if the order was placed before the franchisee received official notification of the price increase. Evidence of such orders would be sales contracts signed by the retail consumers. This protection does not extend to price changes for new product models introduced after the order or price increases resulting from compliance with state or federal laws, or from the revaluation of the United States dollar for foreign-made goods.
This provision primarily protects Better Blend franchisees in Indiana from unexpected cost increases on existing orders. It ensures that franchisees can honor the prices quoted to their customers without absorbing unforeseen price hikes from Better Blend. This could be particularly relevant for franchisees who take pre-orders or special orders from customers.
However, it's important to note the limitations. The protection doesn't apply to new product models or price changes mandated by law or currency revaluation. Therefore, franchisees still need to stay informed about potential cost fluctuations due to these factors. Also, this specific protection is only mentioned in the Indiana Rider, suggesting it may only apply to franchises operating in Indiana.
Prospective Better Blend franchisees should clarify with Better Blend whether similar protections apply in their specific state or if they can negotiate such terms into their franchise agreement. Understanding the circumstances under which Better Blend can change prices is crucial for managing inventory costs and maintaining customer relationships.