Does Bombs Away Franchising have the obligation to collect payments from franchisees on behalf of a vendor?
Bombs_Away Franchise · 2024 FDDAnswer from 2024 FDD Document
- 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 Bombs Away's 2024 Franchise Disclosure Document, Bombs Away Franchising has the right, but not the obligation, to collect payments from franchisees on behalf of a vendor. Bombs Away Franchising may also impose a reasonable markup or charge for administering this payment program. This means that Bombs Away is not required to act as a payment collection agency for its vendors regarding franchisee purchases. However, it retains the option to do so.
For a prospective Bombs Away franchisee, this implies that while Bombs Away may facilitate payments to vendors, franchisees should not rely on this as a guaranteed service. Franchisees must be prepared to manage their own payments to vendors unless Bombs Away chooses to implement this collection service.
Bombs Away Franchising may also negotiate prices and terms with vendors on behalf of the System and may receive rebates, payments, or other consideration from vendors in connection with purchases by franchisees. Bombs Away Franchising may implement a centralized purchasing system or establish a purchasing cooperative, requiring franchisees to join and participate in it under terms Bombs Away determines.