May Crisp & Green receive payments from a supplier as a condition of approving that supplier for the Crisp & Green system?
Crisp_Green Franchise · 2024 FDDAnswer from 2024 FDD Document
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.
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 26–31)
What This Means (2024 FDD)
According to Crisp & Green's 2024 Franchise Disclosure Document, Crisp & Green retains the right to receive payments from authorized suppliers as profit related to their dealings with franchisees and the Crisp & Green system. These payments are often based on a per-unit amount or a percentage rebate, typically ranging from 2% to 7% of franchisee purchases from the vendor.
Specifically, Crisp & Green states that they may receive payments from a supplier as a condition of approving that supplier. This means that a supplier might need to provide some form of compensation or incentive to Crisp & Green in order to become an approved supplier for the franchise system.
For a prospective franchisee, this arrangement means that the cost of goods and services from approved suppliers could be influenced by these payments. While Crisp & Green states these arrangements are to benefit franchisees, it is important for franchisees to ensure that the prices they are paying to approved suppliers are competitive and reasonable, and to understand how these arrangements might affect their overall costs and profitability. Franchisees should also be aware that Crisp & Green has the right to use the payments received from suppliers without restriction for any purposes they deem appropriate.