If Craters & Freighters derives revenue from designated suppliers in the future, how will the basis be disclosed?

According to Craters & Freighters' 2025 Franchise Disclosure Document, while the company and its affiliates did not derive any revenue in 2024 from franchisee purchases or leases from designated suppliers, they reserve the right to do so in the future. Currently, the precise basis for deriving revenue from these sources is undetermined. However, Craters & Freighters assures that if they do begin to derive revenue from franchisee purchases or leases of products and services from designated suppliers, the specific basis by which they will do so will be disclosed to franchisees.

This disclosure is important for prospective franchisees as it ensures transparency regarding potential revenue streams for Craters & Freighters and its affiliates based on franchisee purchases. Knowing how the franchisor benefits financially from these supplier relationships allows franchisees to better assess the overall cost and value proposition of the franchise. It also allows franchisees to evaluate whether the designated suppliers offer competitive pricing and quality compared to alternative options.

Franchisors commonly negotiate rebates or commissions with approved suppliers, and it is typical to disclose these arrangements in the FDD. The disclosure allows franchisees to understand the potential incentives that the franchisor may have in designating specific suppliers. For a prospective Craters & Freighters franchisee, this means that while there are no current revenue-sharing arrangements in place, they should pay attention to any future disclosures regarding this aspect to fully understand the financial relationships within the Craters & Freighters franchise system.