factual

Is Cinch I.T. involved in any purchasing or distribution cooperatives?

Cinch_I_T Franchise · 2024 FDD

Answer from 2024 FDD Document

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, Cinch I.T. is not involved in any purchasing or distribution cooperatives. This means that franchisees will not be participating in any formal group purchasing arrangements organized by Cinch I.T. to obtain better pricing or terms from suppliers.

However, the FDD indicates that Cinch I.T. and its affiliate, Cinch HD LLC, do derive revenue from franchisee purchases through rebates, discounts, and allowances from authorized or designated suppliers. In the fiscal year ending December 31, 2023, Cinch HD LLC received a rebate of $59,565 from a referral partner that franchisees are not required to purchase from. Cinch HD LLC also earned $5,072,783 from required franchisee leases and purchases as of December 2023, representing 100% of its revenue.

Cinch I.T. also has the right to designate themselves or their affiliates as approved suppliers for any products and services, or even as the sole supplier of certain items. Franchisees are required to operate according to Cinch I.T.'s System Standards, which dictate the types, models, and brands of required equipment, hardware, software, inventory, and supplies. Franchisees must purchase these items from Cinch I.T., its affiliates, or designated suppliers. Cinch I.T. estimates that 90% to 100% of a franchisee's ongoing expenditures will be for goods and services purchased from Cinch I.T., its affiliate, or a designated supplier, or according to their standards and specifications.

Disclaimer: This information is extracted from the 2024 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.