Does Cinch I.T. always receive rebates from every supplier?
Cinch_I_T Franchise · 2024 FDDAnswer from 2024 FDD Document
from a referral partner that franchisees are not required to purchase from.
We may use the monies we receive without restriction for any purpose we deem appropriate or necessary. Rebate, discount or allowance programs vary depending on the supplier and the nature of the product or service. Suppliers may pay us based upon the quantities of products our franchisees purchase from them. We may receive fees from a supplier as a condition of our approval of that supplier. Not every supplier pays rebates to us. We do not provide material benefits to franchisees (for example, renewal of existing or granting additional franchises) based on their use of designated or approved suppliers. We may negotiate supply arrangements with suppliers for the benefit of franchisees.
Cooperatives and Purchase Arrangements
We are not involved in any purchasing or distribution cooperatives.
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 22–26)
What This Means (2024 FDD)
According to Cinch I.T.'s 2024 Franchise Disclosure Document, not every supplier pays rebates to the company. The document specifies that rebate, discount, or allowance programs can vary depending on the supplier and the nature of the product or service provided. Suppliers may compensate Cinch I.T. based on the volume of purchases made by franchisees, and Cinch I.T. may also receive fees from a supplier as a condition of approving them.
For a prospective franchisee, this means that the potential for rebates influencing supplier selection exists, but it is not a universal practice. Cinch I.T. has the discretion to use any received monies without restriction for any purpose they deem appropriate. In the fiscal year ending December 31, 2023, Cinch HD LLC, an affiliate, received a rebate of $59,565 from a referral partner that franchisees are not required to purchase from.
This arrangement highlights the importance of understanding the relationships Cinch I.T. has with its suppliers. While Cinch I.T. may negotiate supply arrangements for the benefit of franchisees, the lack of a consistent rebate program across all suppliers suggests that franchisees should evaluate supplier options based on factors beyond potential franchisor rebates, such as quality, cost, and service.