Does Chocolate Fish Coffee have the right to collect payment for vendors together with a markup?
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| withdrawn by electronic wire transfer | |||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. These vendors and suppliers may bill Chocolate Fish Coffee franchisees directly, or Chocolate Fish Coffee can collect payments from franchisees.
Chocolate Fish Coffee may designate third-party vendors and suppliers for services such as computer support, mystery shopping, and customer feedback systems. If Chocolate Fish Coffee collects payments for these vendors, they may include a reasonable markup or charge an administration fee for managing the payment program.
This means that franchisees could potentially pay more than the vendor's actual cost due to the markup or administration fee charged by Chocolate Fish Coffee. Franchisees should inquire about the typical markup percentage or administration fee charged to understand the potential additional costs. It is also important to understand which vendors are mandatory and if there are alternative options.