Does Crisp & Green have any restrictions on how it uses the amounts received from suppliers based on franchisee dealings with them?
Crisp_Green Franchise · 2024 FDDAnswer from 2024 FDD Document
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
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 and its affiliates have no restrictions on how they use the money they get from suppliers. These payments can come in the form of promotional allowances, volume discounts, rebates, and other payments. Crisp & Green states that they can use these funds for any purpose they deem appropriate.
Crisp & Green also reserves the right to receive payments from authorized suppliers as profit related to their dealings with franchisees and the Crisp & Green system. These payments are usually based on a per-unit amount or a percentage rebate, generally ranging from 2% to 7% of franchisee purchases from the vendor. Crisp & Green may also receive payments from a supplier as a condition of approving that supplier.
This arrangement is common in franchising, where franchisors negotiate with suppliers and receive rebates or other considerations. For a prospective Crisp & Green franchisee, this means that while they are required to purchase from approved suppliers, a portion of their spending may indirectly benefit the franchisor. It is important for franchisees to understand that these arrangements exist and to factor them into their overall cost analysis. While the FDD states that Crisp & Green seeks to benefit franchisees when negotiating with suppliers, the ultimate decision on how to use the funds received from suppliers rests with Crisp & Green.