Can Crave Cookies require franchisees to join a purchasing cooperative?
Crave_Cookies Franchise · 2025 FDDAnswer from 2025 FDD Document
- 8.4 Purchasing. Crave Cookies Franchising may negotiate prices and terms with vendors on behalf of the System. Crave Cookies Franchising may receive rebates, payments or other consideration from vendors in connection with purchases by franchisees. Crave Cookies Franchising has the right (but not the obligation) to collect payments from Franchisee on behalf of a vendor and remit the payments to the vendor and to impose a reasonable markup or charge for administering the payment program. Crave Cookies Franchising may implement a centralized purchasing system. Crave Cookies Franchising may establish a purchasing cooperative and require Franchisee to join and participate in the purchasing cooperative on such terms and conditions as Crave Cookies Franchising may determine.
Source: Item 22 — CONTRACTS (FDD page 47)
What This Means (2025 FDD)
According to Crave Cookies's 2025 Franchise Disclosure Document, Crave Cookies Franchising has the right to establish a purchasing cooperative and require franchisees to join. The terms and conditions of this cooperative will be determined by Crave Cookies Franchising. This means that as a franchisee, you may be obligated to participate in a purchasing cooperative if Crave Cookies Franchising decides to implement one.
This requirement could impact a franchisee's operational costs and sourcing options. While the cooperative aims to leverage collective buying power, franchisees may have limited control over vendor selection and pricing. It is important to note that Crave Cookies Franchising may also receive rebates or other considerations from vendors based on franchisee purchases, and they have the right to collect payments from franchisees on behalf of a vendor, potentially imposing a markup for administering the payment program.
Prospective franchisees should inquire about the specifics of any existing or planned purchasing cooperatives, including the criteria for vendor selection, the potential for cost savings, and any associated fees or markups. Understanding the operational details of the purchasing cooperative is crucial for assessing the financial implications and potential benefits for your Crave Cookies franchise.