Where is the information regarding rebates received by Carbones Pizzeria's affiliate taken from?
Carbones_Pizzeria Franchise · 2025 FDDAnswer from 2025 FDD Document
her items from our suppliers. We and our affiliates may receive rebates from various suppliers based upon franchisee purchases from the suppliers. These rebates may be based on a flat amount or percentage of franchisee purchases. Currently, these rebates range from $1 to $10 per case purchased depending upon the item purchased to 1-7% of the amount paid by the franchisee for the product, depending on the product. Our affiliate also receives a flat amount from one supplier to our franchise system. During our fiscal year ended October 31, 2024, our affiliate received $159,266 in revenue from rebates paid to it based on franchisee purchases, of which $30,000 was contributed to our Advertising Fund. This information is taken from our affiliate's
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 12–13)
What This Means (2025 FDD)
According to Carbones Pizzeria's 2025 Franchise Disclosure Document, the information regarding rebates received by its affiliate is derived from the affiliate's internal financial statements. During the fiscal year that ended October 31, 2024, the affiliate received $159,266 in revenue from rebates paid based on franchisee purchases. Of this amount, $30,000 was contributed to the Advertising Fund. These rebates are based on either a flat amount or a percentage of franchisee purchases. Currently, these rebates range from $1 to $10 per case purchased, depending on the item, or from 1% to 7% of the amount paid by the franchisee for the product, depending on the product. The affiliate also receives a flat amount from one supplier to the franchise system.
This means that Carbones Pizzeria's affiliate benefits financially from franchisee purchases through negotiated rebates with suppliers. A portion of these rebates is then allocated to the Advertising Fund, which is used to support advertising efforts for the benefit of all franchisees. This arrangement incentivizes the franchisor to negotiate favorable terms with suppliers, as the affiliate's revenue is directly tied to franchisee purchasing volume.
For a prospective franchisee, this information highlights the importance of understanding the approved supplier network and the potential costs associated with purchasing required products. While the rebates may indirectly benefit franchisees through advertising support, it is essential to evaluate whether the prices charged by approved suppliers are competitive compared to alternative sources. Franchisees should also inquire about the specific criteria used to select and approve suppliers to ensure transparency and fairness in the purchasing process.