Are any officers of Capriottis Sandwich Shop currently owners of any approved supplier?
Capriottis_Sandwich_Shop Franchise · 2025 FDDAnswer from 2025 FDD Document
AND SERVICES**
You must purchase the following goods or services: our then-current trade dress; point-of-sales system, including the computer hardware and software further described in Item 11; restaurant fixtures, furniture, and other equipment as listed in the Manual; and specified light fixtures. Neither we nor any individuals affiliated with us currently derive any income or revenue based on or as a result of our or their sales of these items to you. None of our officers currently owns an interest in any approved supplier. Neither we nor any of our affiliates are an approved supplier or the only approved supplier for any item used in your Restaurant, but nothing in the Franchise Agreement or Development Rights Agreement prohibits us from becoming an approved supplier in the future.
We and/or our affiliates have the right to derive revenue—in the form of promotional allowances, volume discounts, commissions, other discounts, performance payments, signing bonuses, rebates, marketing and advertising allowances, free products, and other economic benefits and payments—from suppliers that we designate, approve, or recommend for some or all CAPRIOTTI'S Restaurants on account of those suppliers' prospective or actual dealings with your Restaurant and other CAPRIOTTI'S Restaurants. That revenue may or may not be related to services we and our affiliates perform. All amounts received from suppliers, whether or not based on your or other franchisees' purchases from those suppliers, will be our and our affiliates' exclusive property, which we and they may retain and use without restriction for any purposes we and they deem appropriate. Any products or services that we or our affiliates sell you directly may be sold to you at prices exceeding our or their costs. In 2024, we received (according to our internal records) approximately $1,165,000 in rebates, which is approximately 4% of our total 2024 revenue of $27,715,249. We and our affiliates did not sell or lease any products or services directly to our franchisee
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 26–29)
What This Means (2025 FDD)
According to the 2025 Capriottis Sandwich Shop Franchise Disclosure Document, none of the officers currently owns an interest in any approved supplier. This means that the individuals in leadership positions at Capriottis Sandwich Shop do not have a financial stake in the companies that supply goods or services to the franchisees. This arrangement aims to prevent potential conflicts of interest where officers might prioritize their own financial gains over the best interests of the franchisees.
This arrangement is beneficial for prospective franchisees because it promotes fair dealings and reduces the risk of being obligated to purchase from suppliers that may not offer the best prices or quality. It ensures that the selection of approved suppliers is based on objective criteria such as quality, price, and service rather than personal financial interests. However, the FDD also states that neither Capriottis Sandwich Shop nor its affiliates are currently approved suppliers, but they retain the right to become approved suppliers in the future.
It is important to note that while officers do not have ownership in approved suppliers, Capriottis Sandwich Shop and its affiliates have the right to receive revenue from suppliers in the form of promotional allowances, volume discounts, commissions, and other economic benefits. In 2024, Capriottis Sandwich Shop received approximately $1,165,000 in rebates, which was about 4% of their total revenue of $27,715,249. This revenue is the exclusive property of Capriottis Sandwich Shop and its affiliates, and they can use it without restriction. While this is a common practice in franchising, prospective franchisees should understand how these arrangements work and how they might affect the overall cost and supply chain of their business.