Can Ella Cafe receive money or other benefits from Designated Suppliers based on a franchisee's purchases?
Ella_Cafe Franchise · 2024 FDDAnswer from 2024 FDD Document
Franchisee will purchase only from Franchisor, suppliers, or distributors designated by Franchisor ("Designated Suppliers"): (a) fixtures, furniture, equipment, interior and exterior signage, decor, trade dress (as Franchisor defines trade dress), and Coffee House design consulting services; (b) food products and ingredients, whether or not they are developed by or for Franchisor pursuant to a special recipe, formula, or specifications; (c) all fountain and bottled beverages; (d) uniforms, shirts, memorabilia, and all merchandise and items intended for retail sale (whether or
not bearing our Marks); (e) advertising, point-of-purchase materials, and other printed promotional materials; (f) gift certificates, stored value cards, and other non-cash payment systems; (g) stationery, business cards, contracts, and forms; (h) bags, packaging, and supplies bearing Franchisor's Marks; and (i) all other goods and/or services as Franchisor requires. Franchisor may receive money or other benefits from Designated Suppliers based on Franchisee's purchases. Franchisee agrees that Franchisor has the right to retain and use all such benefits as it deems appropriate, in its sole discretion. Franchisor herby retains the right to add, delete, or modify any items which must be purchased from the Designated Supplier by updating the operations manual. Furthermore, franchisor retains the right to be the Designated Supplier for certain initial inventories including but not limited to coffee beans and ground coffee, supplies, branded paper products, and similar merchandises. Franchisor retains the right to be the sole supplier for any branded products used in operation of your Franchised Business.
Source: Item 22 — CONTRACTS (FDD page 50)
What This Means (2024 FDD)
According to Ella Cafe's 2024 Franchise Disclosure Document, Ella Cafe has the right to receive money or other benefits from designated suppliers based on a franchisee's purchases. These designated suppliers are those that Ella Cafe franchisees are required to purchase from.
Ella Cafe franchisees must purchase certain items from Ella Cafe's designated suppliers, including fixtures, furniture, equipment, signage, decor, food products and ingredients, beverages, uniforms, merchandise, advertising materials, gift certificates, stationery, and branded supplies.
Ella Cafe retains the right to use any benefits it receives from these suppliers as it sees fit. Ella Cafe also retains the right to add, delete, or modify the list of items that franchisees must purchase from designated suppliers by updating the operations manual. Furthermore, Ella Cafe retains the right to be the Designated Supplier for certain initial inventories including but not limited to coffee beans and ground coffee, supplies, branded paper products, and similar merchandises. Ella Cafe retains the right to be the sole supplier for any branded products used in operation of your Franchised Business.