Are there any specific obligations for purchases and leases that Bombs Away franchisees must adhere to?
Bombs_Away Franchise · 2024 FDDAnswer from 2024 FDD Document
pecific Obligations
The following are our current specific obligations for purchases and leases:
- A. Insurance. You must obtain insurance as described in the Franchise Agreement and in our Manual, which includes (i) Commercial General Liability insurance, including products liability coverage, and broad form commercial liability coverage, written on an "occurrence" policy form in an amount of not less than $1,000,000 single limit per occurrence and $2,000,000 aggregate limit, (ii) Business Automobile Liability insurance including owned, leased, non-owned and hired automobiles coverage in an amount of not less than $1,000,000, and (iii) Workers Compensation coverage as required by state law. Your policies (other than Workers Compensation) must list us and our affiliates as an additional insured, must include a waiver of subrogation in favor of us and our affiliates, must be primary and non-contributing with any insurance carried by us or our affiliates, and must stipulate that we receive 30 days' prior written notice of cancellation.
- B. Computer software and hardware. You must purchase and use the computer software and hardware that we specify. See Item 11 for more details.
- C. Products, supplies and inventory. You must purchase the customized litter box covers for the Van Ness® CP2 large litter from our affiliate. All other required products, supplies and/or inventory will be purchased from our approved vendors.
- D. CRM Management. You must use our CRM Management administrative services. You will purchase the CRM Management administrative services from our approved supplier.
- E. Vehicle. You must use a vehicle appropriate for your business with our branded logo/wrap. We strongly recommend a midsize pickup truck, white in color, such as a Toyota Tundra or Nissan Frontier. It must be in excellent or better condition, clean, dent-free, and otherwise presenting a professional appearance. The low-end estimate assumes you already have a personal vehicle for the business. The high assumes you lease a new vehicle, with certain fees and costs payable upon signing the lease.
Us or our Affiliates as Supplier
We currently do not derive revenue from the required purchases and leases by franchisees.
We reserve the right to be a supplier (or the sole supplier) of a good or service in the future.
Our affiliate, Bombs Away Brand, LLC is currently a supplier of the customized litter box covers for the Van Ness® CP2 large litter that you must purchase.
Ownership of Suppliers
Our officer owns an interest in a supplier to our franchisees.
Alternative Suppliers
If you want to use a supplier that is not on our list of approved suppliers, you must request our approval in writing. We will grant or revoke approvals of suppliers based on criteria appropriate to the situation, which may include evaluations of the supplier's capacity, quality, financial stability, reputation, and reliability; inspections;
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 15–17)
What This Means (2024 FDD)
According to Bombs Away's 2024 Franchise Disclosure Document, franchisees have several specific obligations regarding purchases and leases. These obligations cover various aspects of the business, from insurance to vehicle requirements. Franchisees must secure specific insurance coverage, including Commercial General Liability insurance with minimum limits of $1,000,000 per occurrence and $2,000,000 in aggregate, Business Automobile Liability insurance of at least $1,000,000, and Workers Compensation coverage as mandated by state law. Additionally, Bombs Away and its affiliates must be listed as additional insured on the policies, with a waiver of subrogation and 30 days' prior written notice of cancellation. Franchisees are also obligated to purchase and use the computer software and hardware specified by Bombs Away, with further details available in Item 11 of the FDD.
Bombs Away franchisees are required to purchase customized litter box covers for the Van Ness® CP2 large litter from Bombs Away Brand, LLC, an affiliate of the franchisor. All other required products, supplies, and inventory must be sourced from Bombs Away's approved vendors. Franchisees must also utilize Bombs Away's CRM Management administrative services, purchasing these services from an approved supplier. A suitable vehicle displaying Bombs Away's branded logo/wrap is also mandatory. While a midsize pickup truck (white in color) like a Toyota Tundra or Nissan Frontier is strongly recommended, the vehicle must be in excellent condition and present a professional appearance. The FDD notes that the estimated cost for the vehicle varies depending on whether the franchisee already owns a suitable vehicle or chooses to lease a new one.
Bombs Away estimates that required purchases and leases account for 25% to 50% of the total costs to establish the business and operate it. While Bombs Away states they do not currently derive revenue from required franchisee purchases and leases, they reserve the right to become a supplier (or the sole supplier) of goods and services in the future. However, Bombs Away will receive $10 for each Wysiwash® product sold through the referral program, with the franchisee receiving a $10 discount on the product. Although Bombs Away negotiates purchase arrangements with suppliers for the benefit of franchisees, these arrangements are subject to change. Franchisees seeking to use alternative suppliers must obtain written approval from Bombs Away, which will evaluate suppliers based on criteria such as capacity, quality, and financial stability.