Does Crisp & Green profit from items franchisees purchase from them as a designated supplier?
Crisp_Green Franchise · 2024 FDDAnswer from 2024 FDD Document
nchisee Purchases and Leases**
We and/or our affiliates may derive revenue from franchisee purchases and leases to the extent that you purchase products or services directly from us or our affiliates. In our last fiscal year ended December 31, 2023, however, neither we nor our affiliates received any revenues from the sale of goods and services to our franchisees.
In addition, we and/or our affiliates may derive revenue or other material consideration based on your purchases of goods and services from our approved suppliers in the form of promotional allowances, volume discounts, rebates, and other payments that approved or required suppliers make to us and our affiliates. We and our affiliates may use all amounts received from suppliers, whether or not based on your and other franchisees' prospective or actual dealings with them, without restriction for any purposes that we and our affiliates deem appropriate. We do and reserve the right to receive payments from authorized suppliers that we retain as profit related to their dealings with our franchisees and the System, and suppliers may pay us based upon the quantities of products the System purchases from them. These payments will usually be based upon an amount per unit or percentage rebate, and generally range from 2% to 7% of the purchases you make from the vendor. We may receive payments from a supplier as a condition of our approval of that supplier.
Estimated Proportion of Required Purchases and Leases to all Purchases and Leases
We estimate that the purchases and leases that you must make from us or our affiliates, from designated or approved suppliers, or according to our standards will represent approximately 95% of your total purchases in connection with establishing your Franchised Restaurant (excluding the franchise fee and other non-goods expenditures), and over 90% of the ongoing costs that you will need to operate your Franchised Restaurant (excluding franchise fees and royalties and other non-goods expenditures).
Cooperatives; Negotiated Prices; Material Benefits; Market Research
There are no purchasing or distribution cooperatives related to CRISP & GREEN® franchises.
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 26–31)
What This Means (2024 FDD)
According to the 2024 Crisp & Green Franchise Disclosure Document, Crisp & Green and its affiliates may generate revenue from franchisee purchases if franchisees buy products or services directly from them. However, for the fiscal year ending December 31, 2023, neither Crisp & Green nor its affiliates received any revenues from the sale of goods and services to franchisees.
Crisp & Green also has the right to receive payments from authorized suppliers as profit related to their dealings with franchisees. These payments are usually based on a per-unit amount or a percentage rebate, generally ranging from 2% to 7% of the franchisee's purchases from the vendor. Crisp & Green may also receive payments from a supplier as a condition of approving that supplier.
If Crisp & Green becomes a designated supplier, they may charge a reasonable mark-up, surcharge, and handling fee on items franchisees purchase from them, which would include a profit for Crisp & Green. The FDD states that purchases from Crisp & Green, its affiliates, designated or approved suppliers, or according to their standards, will represent approximately 95% of the total purchases for establishing the franchised restaurant (excluding the franchise fee and other non-goods expenditures) and over 90% of the ongoing costs to operate the restaurant (excluding franchise fees and royalties and other non-goods expenditures).