Does Bft negotiate supply contracts with suppliers to benefit both the company and its franchisees?
Bft Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
We may, when appropriate, negotiate purchase arrangements, including price terms, with designated and Approved Suppliers on behalf of the System. We may establish strategic alliances or preferred vendor programs with suppliers that are willing to supply some products, equipment, or services to some or all of the Studios in our System. If we do establish those types of alliances or programs, we may: (i) limit the number of Approved Suppliers with whom you may deal; (ii) designate sources that you must use for some or all products, equipment and services; and (iii) refuse to approve proposals from franchisees to add new suppliers if we believe that approval would not be in the best interests of the System.
We and/or our affiliates may receive payments or other compensation from Approved Suppliers or any other suppliers on account of these suppliers' dealings with us, you, or other Studios in the System, such as rebates, commissions or other forms of compensation, which may comprise of fixed payments and/or percentages of overall sales transactions. 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.
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 negotiate supply contracts with suppliers to secure prices that benefit both Bft and its franchisees.
Bft may also establish strategic alliances or preferred vendor programs with suppliers. If these alliances or programs are established, Bft has the right to limit the number of approved suppliers, designate specific sources franchisees must use, and refuse proposals from franchisees to add new suppliers if it's not in the best interest of the Bft system.
Bft and its affiliates may receive compensation from approved suppliers in the form of rebates, commissions, or other payments. In 2024, Bft received $154,772 in allowances, rebates, or other consideration from vendors, which was 6.3% of Bft's total revenue of $2,447,103. Additionally, 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 for any purpose they deem appropriate.