May Chocolate Fish Coffee implement a centralized purchasing system?
Chocolate_Fish_Coffee Franchise · 2024 FDDAnswer from 2024 FDD Document
- 8.4 Purchasing. Chocolate Fish Franchising may negotiate prices and terms with vendors on behalf of the System.
Chocolate Fish Franchising may receive rebates, payments or other consideration from vendors in connection with purchases by franchisees.
Chocolate Fish Franchising has the right (but not the obligation) to collect payments from Franchisee on behalf of a vendor and remit the payments to the vendor and to impose a reasonable markup or charge for administering the payment program.
Chocolate Fish Franchising may implement a centralized purchasing system.
Chocolate Fish Franchising may establish a purchasing cooperative and require Franchisee to join and participate in the purchasing cooperative on such terms and conditions as Chocolate Fish Franchising may determine.
8.5 No Liability of Franchisor. Chocolate Fish Franchising shall not have any liability to Franchisee for any claim or loss related to any product provided or service performed by any Approved Vendor or Required Vendor, including without limitation defects, delays, or unavailability of products or services.
8.6 Product Recalls. If Chocolate Fish Franchising or any vendor, supplier, or manufacturer of an item used or sold in Franchisee's Business issues a recall of such item or otherwise notifies Franchisee that such item is defective or dangerous, Franchisee shall immediately cease using or selling such item, and Franchisee shall at its own expense comply with all instructions from Chocolate Fish Franchising or the vendor, supplier, or manufacturer of such item with respect to such item, including without limitation the recall, repair, and/or replacement of such item.
Source: Item 23 — RECEIPTS (FDD pages 41–119)
What This Means (2024 FDD)
According to Chocolate Fish Coffee's 2024 Franchise Disclosure Document, Chocolate Fish Franchising has the right to implement a centralized purchasing system. This means that Chocolate Fish Coffee can establish a system where franchisees are required to purchase goods and services through a central channel managed by the franchisor.
Chocolate Fish Coffee also has the option to negotiate prices and terms with vendors on behalf of the entire franchise system. They may also receive rebates, payments, or other forms of compensation from vendors based on franchisee purchases. Furthermore, Chocolate Fish Coffee has the right to collect payments from franchisees on behalf of vendors, remit those payments, and impose a reasonable markup or charge for administering this payment program.
Chocolate Fish Coffee can also establish a purchasing cooperative and require franchisees to join and participate under the terms and conditions set by Chocolate Fish Coffee. However, Chocolate Fish Coffee assumes no liability to the franchisee for any claims or losses related to products or services provided by approved or required vendors, including defects, delays, or unavailability. If a product recall is issued, the franchisee must cease using or selling the item and comply with Chocolate Fish Coffee's instructions for recall, repair, or replacement.