Does Bombs Away Franchising have the right to collect payments from Franchisee 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 to collect payments from franchisees on behalf of vendors. Bombs Away Franchising is not obligated to collect payments, but they have the right to do so. Bombs Away Franchising can also impose a reasonable markup or charge for administering the payment program.
This means that Bombs Away franchisees may be required to make payments for goods or services to Bombs Away Franchising, who will then remit those payments to the appropriate vendor. This could streamline the payment process for franchisees and ensure that vendors are paid in a timely manner.
However, franchisees should be aware that Bombs Away Franchising may charge a markup or fee for this service, which would increase the overall cost of goods or services. Franchisees should inquire about the amount of any such markup or fee before agreeing to participate in the program. Bombs Away Franchising may also implement a centralized purchasing system or establish a purchasing cooperative that the franchisee is required to join.