Is Burros Fries obligated to share any rebates or commissions received from vendors with the Burros Fries franchisee?
Burros_Fries Franchise · 2024 FDDAnswer from 2024 FDD Document
We may derive income through license fees, promotional fees, advertising allowances, rebates or other monies paid by approved vendors and/or suppliers. We do not know the precise basis of these payments because we have never previously collected them but if we collect such payments we have the discretion to use them as we determine.
Source: Item 22 — CONTRACTS (FDD page 53)
What This Means (2024 FDD)
According to the 2024 Burros Fries Franchise Disclosure Document, Burros Fries may receive income from approved vendors and suppliers through license fees, promotional fees, advertising allowances, or rebates. However, Burros Fries is not obligated to share these monies with franchisees. Instead, Burros Fries has the discretion to use these payments as they determine.
This means that while franchisees are required to purchase from approved vendors, any financial benefits Burros Fries receives from those vendors do not automatically translate into direct savings or revenue sharing for the franchisee. The franchisee will not have a say in how Burros Fries uses the rebates or commissions they receive from the approved vendors.
It is important for a prospective Burros Fries franchisee to understand that while they are obligated to use approved vendors, they may not directly benefit from any rebates or other payments those vendors make to Burros Fries. This is a common practice in franchising, where the franchisor seeks to generate revenue through vendor relationships, but it's crucial for franchisees to be aware of this dynamic.