Can third-party vendors and suppliers bill Crab N Spice franchisees directly?
Crab_N_Spice Franchise · 2024 FDDAnswer from 2024 FDD Document
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| Type of Fee | Amount | Due Date | Remarks |
|---|---|---|---|
| Currently, none. | Varies | 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. | |||
| The vendors and suppliers may bill | |||
| franchisees directly, or we have the right | |||
| to collect payment for these vendors | |||
| together a reasonable markup or charge | |||
| for administering the payment program. | |||
| We may charge you $500 if your business | |||
| is not in compliance with our system | |||
| specifications or the franchise agreement | |||
| and you fail to correct the non-compliance | |||
| after 30 days’ notice. Thereafter, we may | |||
| charge you $250 per week until you | |||
| correct such non-compliance. | |||
| Amount that we | If we pay any amount that you owe or are | ||
| spend on your | required to pay to a third party, you must | ||
| behalf, plus 10% | reimburse us. | ||
| $100 plus interest on | We may charge a late fee if you fail to | ||
| the unpaid amount at | make a required payment when due. | ||
| a rate equal to 18% | |||
| per year (or, if such | |||
| payment exceeds the | |||
| maximum allowed | |||
| by law, then interest | |||
| at the highest rate | |||
| allowed by law) | |||
| $30 (or, if such | |||
| amount exceeds the | |||
| maximum allowed | |||
| by law, then the | |||
| maximum allowed | |||
| by law) | |||
| Our actual costs | Payable if we incur costs (including | ||
| reasonable attorney fees) in attempting to | |||
| collect amounts you owe to us. |
Source: Item 6 — OTHER FEES (FDD pages 11–14)
What This Means (2024 FDD)
According to Crab N Spice's 2024 Franchise Disclosure Document, third-party vendors and suppliers may bill franchisees directly for certain services. Crab N Spice has the right to require franchisees to use designated third-party vendors and suppliers for services such as computer support, mystery shopping, and customer feedback systems.
In some instances, Crab N Spice may collect payments from franchisees on behalf of these vendors, potentially adding a reasonable markup or charge for administering the payment program. However, in the case of a failed food safety audit, the franchisee is required to pay the third-party auditor directly upon receiving the invoice.
It's important for prospective Crab N Spice franchisees to understand that while some vendor payments may be handled directly, Crab N Spice reserves the right to manage these payments and add administrative charges. Franchisees should clarify with Crab N Spice which specific vendors they will be required to use and the expected billing procedures for each.