May Bft or its affiliates derive revenue from purchases franchisees are required to make?
Bft Franchise · 2025 FDDAnswer from 2025 FDD Document
We and our affiliates may derive revenue from any of the purchases that our System franchisees are required to make in connection with the Studio. In fiscal year 2024, we did not receive any revenue from the sale of goods and services to franchisees, but our Predecessor received $4,727,544 from franchisees.
During the fiscal year 2024, we received $154,772 in allowances, rebates, or other consideration from vendors in connection with purchases by franchisees, which constituted 6.3% of our total revenue of $2,447,103 during the year, and our Predecessor received $594,663 in similar allowances, rebates, and other consideration. Additionally, Xponential received $6,837,252 in allowances, rebates, or other consideration from vendors in connection with purchases by franchisees of all Xponential Brands in the United States and Canada. We may use any amounts that we receive from suppliers for any purpose that we deem appropriate. We and/or our affiliates may negotiate supply contracts with our suppliers under which we are able to purchase products, equipment, supplies, services and other items at a price that will benefit us and our franchisees.
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 32–36)
What This Means (2025 FDD)
According to Bft's 2025 Franchise Disclosure Document, Bft and its affiliates may derive revenue from the required purchases that franchisees make in connection with their studios. These required purchases are estimated to be about 39% to 73% of the total purchases to establish the studio and about 50% to 66% of the purchases to continue operating the studio; these percentages do not include lease payments.
In fiscal year 2024, Bft did not receive any revenue from the sale of goods and services to franchisees, but its Predecessor received $4,727,544 from franchisees. Additionally, Bft may receive payments or other compensation from approved suppliers or any other suppliers due to their dealings with Bft, its franchisees, or other studios within the system. This compensation can take the form of rebates, commissions, or other forms, which may include fixed payments and/or percentages of overall sales transactions.
During the fiscal year 2024, Bft received $154,772 in allowances, rebates, or other consideration from vendors related to franchisee purchases, which constituted 6.3% of Bft's total revenue of $2,447,103 during the year. Bft's Predecessor received $594,663 in similar allowances, rebates, and other consideration. Furthermore, Xponential received $6,837,252 in allowances, rebates, or other consideration from vendors related to purchases by franchisees of all Xponential Brands in the United States and Canada. Bft can use these amounts received from suppliers for any purpose it deems appropriate. Bft and its affiliates may also negotiate supply contracts with suppliers to purchase products, equipment, supplies, services, and other items at prices that benefit both Bft and its franchisees.