What does the Indiana Rider require Desi District to do with any benefit obtained from a person the franchisee does business with?
Desi_District Franchise · 2024 FDDAnswer from 2024 FDD Document
- (4) Allowing the franchisor to obtain money, goods, services, or any other benefit from any other person with whom the franchisee does business, on account of, or in relation to, the transaction between the franchisee and the other person, other than for compensation for services rendered by the franchisor, unless the benefit is promptly accounted for, and transmitted to the franchisee.
Source: Item 23 — RECEIPTS (FDD pages 52–140)
What This Means (2024 FDD)
According to Desi District's 2024 Franchise Disclosure Document, the Indiana Rider modifies the franchise agreement to comply with Indiana franchise laws. Specifically, it addresses situations where Desi District receives benefits from a third party due to the franchisee's business dealings.
The Indiana Rider stipulates that if Desi District obtains money, goods, services, or any other benefit from a person the franchisee does business with, related to transactions between the franchisee and that person, Desi District must promptly account for and transmit that benefit to the franchisee. This requirement does not apply if the benefit is compensation for services Desi District rendered.
In simpler terms, if Desi District receives kickbacks or incentives from suppliers or other entities because a franchisee is using their services, those benefits must be passed on to the franchisee, unless the payment is for services Desi District directly provided. This provision aims to prevent Desi District from profiting unfairly from the franchisee's business relationships and ensures transparency in financial transactions. A prospective franchisee in Indiana should understand this rider protects them from hidden fees or revenue streams benefiting the franchisor at their expense.