Can Chocolate Fish Coffee charge a fee for administering the payment program for vendors?
Chocolate_Fish_Coffee Franchise · 2024 FDDAnswer from 2024 FDD Document
| Type of Fee | Amount | Due Date | Remarks |
|---|---|---|---|
| 6% of your gross | Weekly, on | See Note 1 and Note 2. | |
| sales | Wednesday | ||
| 1% of your gross | See Item 11 for a detailed discussion | ||
| sales | about these funds. Amounts due will be | ||
| withdrawn by electronic wire transfer | |||
| from your designated bank account. | |||
| If you send a manager or other employee | |||
| to our training program after you open, we | |||
| will charge our then-current training fee. | |||
| We have the right to require franchisees to | |||
| use third-party vendors and suppliers that | |||
| we designate. Examples can include | |||
| computer support vendors, mystery | |||
| shopping, and customer feedback systems. |
Source: Item 6 — OTHER FEES (FDD pages 10–13)
What This Means (2024 FDD)
According to Chocolate Fish Coffee's 2024 Franchise Disclosure Document, Chocolate Fish Coffee has the right to collect payments for third-party vendors and suppliers that they designate for franchisees. These vendors can include computer support, mystery shopping, and customer feedback systems.
Chocolate Fish Coffee can either have the vendors bill the franchisees directly or collect payment themselves. If Chocolate Fish Coffee collects the payments, they may include a reasonable markup or charge for administering the payment program. This means that franchisees could potentially pay more than the vendor's actual invoice amount due to this administrative fee or markup.
This policy gives Chocolate Fish Coffee the flexibility to manage vendor relationships and ensure franchisees utilize approved suppliers. However, it also introduces a potential cost factor for franchisees, as they may incur additional charges beyond the direct vendor costs. Franchisees should clarify with Chocolate Fish Coffee what the typical markup or administrative fee is for vendor payments to accurately budget their operating expenses.