What is the Bombs Away franchisee's obligation regarding payments to vendors and suppliers?
Bombs_Away Franchise · 2024 FDDAnswer from 2024 FDD Document
ARTICLE 8. SUPPLIERS AND VENDORS
- 8.1 Generally. Franchisee shall acquire all Inputs required by Bombs Away Franchising from time to time in accordance with System Standards. Bombs Away Franchising may require Franchisee to purchase or lease any Inputs from Bombs Away Franchising, Bombs Away Franchising's designee, Required Vendors, Approved Vendors, and/or under Bombs Away Franchising's specifications. Bombs Away Franchising may change any such requirement or change the status of any vendor. To make such requirement or change effective, Bombs Away Franchising shall issue the appropriate System Standards.
- 8.2 Alternate Vendor Approval. If Bombs Away Franchising requires Franchisee to purchase a particular Input only from an Approved Vendor or Required Vendor, and Franchisee desires to purchase the Input from another vendor, then Franchisee must submit a written request for approval and any information, specifications and/or samples requested by Bombs Away Franchising. Bombs Away Franchising may condition its approval on such criteria as Bombs Away Franchising deems appropriate, which may include evaluations of the vendor's capacity, quality, financial stability, reputation, and reliability; inspections; product testing, and performance reviews. Bombs Away Franchising will provide Franchisee with written notification of the approval or disapproval of any proposed new vendor within 30 days after receipt of Franchisee's request.
- 8.3 Alternate Input Approval. If Bombs Away Franchising requires Franchisee to purchase a particular Input, and Franchisee desires to purchase an alternate to the Input, then Franchisee must submit a written request for approval and any information, specifications and/or samples requested by Bombs Away Franchising. Bombs Away Franchising will provide Franchisee with written notification of the approval or disapproval of any proposed alternate Input within 30 days after receipt of Franchisee's request.
- 8.4 Purchasing. Bombs Away Franchising may negotiate prices and terms with vendors on behalf of the System. Bombs Away Franchising may receive rebates, payments, or other consideration from vendors in connection with purchases by franchisees. Bombs Away Franchising has the right (but not the obligation) to collect payments from Franchisee on behalf of a vendor and remit the payments to the vendor, and to impose a reasonable markup or charge for administering the payment program. Bombs Away Franchising may implement a centralized purchasing system. Bombs Away Franchising may establish a purchasing cooperative and require Franchisee to join and participate in the purchasing cooperative on such terms and conditions as Bombs Away Franchising may determine.
Source: Item 22 — CONTRACTS (FDD pages 35–36)
What This Means (2024 FDD)
According to the 2024 Bombs Away Franchise Disclosure Document, franchisees are generally required to acquire all inputs, which are the supplies and materials needed to run the business, in accordance with the System Standards. Bombs Away may require franchisees to purchase or lease inputs from specific sources, including Bombs Away itself, its designees, or required and approved vendors. Bombs Away retains the right to change these requirements or the status of any vendor by issuing updated System Standards.
If a franchisee wishes to use an alternate vendor when Bombs Away requires purchasing from an approved or required vendor, the franchisee must submit a written request for approval with any necessary information, specifications, or samples. Bombs Away has 30 days to respond to the request. Approval may depend on factors like the vendor's capacity, quality, financial stability, reputation, and reliability, as well as inspections, product testing, and performance reviews. Similarly, if a franchisee wants to use an alternate input, they must also submit a written request for approval, which Bombs Away will respond to within 30 days.
Bombs Away Franchising may negotiate prices and terms with vendors on behalf of the entire Bombs Away system and may receive rebates, payments, or other considerations from vendors based on franchisee purchases. Bombs Away has the option, but not the obligation, to collect payments from franchisees on behalf of a vendor and remit those payments, potentially adding a markup or charge for administering this payment program. Bombs Away may also implement a centralized purchasing system or establish a purchasing cooperative that franchisees may be required to join.