Is Burneys Sweets More entitled to profits from selling goods and services to franchisees?
Burneys_Sweets_More Franchise · 2025 FDDAnswer from 2025 FDD Document
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- (iii) Supplier Fees. If Franchisor or any of its affiliates is the designated supplier for any required product or service for the Shop, Franchisee shall pay Franchisor's or its affiliates' then-current rates for such products and services.
- (iv) Shared Fees. Franchisor reserves the right to have suppliers bill it or an affiliate for goods and services that benefit the network of BURNEY'S SWEETS & MORE franchisees. Franchisee agrees to pay Franchisor Franchisee's pro rata share of the costs and fees of these goods and services.
- (b) Franchisee Account. On each Due Date, Franchisee must pay Franchisor the fees set forth above, as well as any other amounts due to Franchisor under this Agreement or any other agreement between Franchisor and Franchisee. Franchisor may instead transfer these amounts due from the Franchisee's bank operating account ("Account"). If a transfer from Franchisee's Account is refused, an administrative fee of Twenty-Five Dollars ($25) may be assessed, as well as reimbursement to Franchisor of any fee its bank charges for uncollected deposit funds.
Source: Item 22 — CONTRACTS (FDD page 50)
What This Means (2025 FDD)
According to the 2025 Burneys Sweets More FDD, Burneys Sweets More can profit from selling goods and services to its franchisees. If Burneys Sweets More or its affiliates are the designated supplier for any required product or service for the franchisee's shop, the franchisee must pay the then-current rates for those products and services. This means Burneys Sweets More can generate revenue through the supply chain by acting as a mandatory vendor.
Burneys Sweets More also reserves the right to have suppliers bill it or an affiliate for goods and services that benefit the entire network of Burneys Sweets More franchisees. In this case, the franchisee agrees to pay their pro rata share of the costs and fees for these goods and services. This implies that Burneys Sweets More can negotiate deals on behalf of the franchise system and pass those costs, presumably with a markup or administrative fee, onto the franchisees.
Furthermore, Burneys Sweets More reserves any and all rights not expressly granted to the franchisee, including the right to sell products and services anywhere (even within the franchisee's protected territory) under the Burneys Sweets More name or any other name, through any channel of distribution other than a brick-and-mortar Burneys Sweets More shop in the protected territory. This allows Burneys Sweets More to compete with its own franchisees through alternative channels, potentially impacting their sales and profitability, while Burneys Sweets More retains the profits from those sales.