Is Card My Yard or its affiliates allowed to derive revenue from franchisee purchases and leases?
Card_My_Yard Franchise · 2025 FDDAnswer from 2025 FDD Document
ment that a majority of the Card My Yard businesses then operated by us or our Affiliates have made or are utilizing best efforts to make such improvements.
E. Sourcing.
- (1) You agree to comply with all of our standards and specifications for the purchase of all inventory, supplies, materials, fixtures, furnishings, equipment, Computer Systems, and other products used or offered for sale at the Card My Yard business. If we have approved or designated suppliers (which may include us or our Affiliates or third party manufacturers, distributors and other sources) for any such item, you agree to obtain these items from those suppliers. Our approved or designated suppliers are those who demonstrate on a continuing basis the ability to meet our standards and specifications; who have adequate quality controls and the capacity to supply the needs of the Card My Yard business franchise network promptly and reliably over an extended period of time; and who have been approved in writing by us and who have not thereafter been disapproved by us. We may designate ourselves, our Affiliates or a third party as an approved or designated supplier, or as the sole approved or designated supplier of any item. You agree that we and our Affiliates may derive revenue based on your purchases and leases (including, without limitation, from charging you for products and services we or our Affiliates provide to you and from payments made to us or our Affiliates by suppliers that we designate or appr
Source: Item 23 — RECEIPTS (FDD pages 84–259)
What This Means (2025 FDD)
According to Card My Yard's 2025 Franchise Disclosure Document, Card My Yard and its affiliates may derive revenue from franchisee purchases and leases. Specifically, Card My Yard may generate income from franchisees through direct charges for products and services that Card My Yard or its affiliates provide. Additionally, Card My Yard may receive payments from suppliers that Card My Yard designates or approves for franchisees to use.
For a Card My Yard franchisee, this means that the cost of running the franchise may include direct payments to Card My Yard or its affiliates for necessary supplies and services. It also implies that Card My Yard could potentially profit from arrangements with approved suppliers based on the volume of purchases made by franchisees.
The FDD specifies that franchisees are currently required to purchase yard letters/signs (or related materials and equipment) totaling at least $500 each year directly from Card My Yard. This establishes a clear example of how Card My Yard directly benefits financially from franchisee purchases. Franchisees need to factor these required purchases and potential supplier markups into their overall cost projections. This arrangement is fairly common in franchising, where franchisors often derive revenue from required purchases to maintain quality control and brand consistency across the franchise system.