What is the definition of 'Required Purchases' for an Expense Reduction Analysts franchise?
Expense_Reduction_Analysts Franchise · 2025 FDDAnswer from 2025 FDD Document
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Required Purchases and Right to Derive Revenue
The products or services we require you to purchase or lease from an Approved Supplier, or purchase or lease in accordance with our standards and specifications, are referred to collectively as your "Required Purchases." We estimate that your Required Purchases will account for approximately less than 2.5% of your total costs incurred in establishing your Consulting Business, and approximately less than 2.0% of your ongoing costs to operate the Consulting Business after the initial start-up phase. We may designate sources, including affiliated entities, for additional goods and services in the future. If we designate sources for additional goods and services, we may receive revenue, rebates, commissions or other material consideration from franchisee purchases.
We reserve the right to derive revenue from Required Purchase that our System franchisees are required to make in connection with the Consulting Business. In our last fiscal year ending December 31, 2024, we generated $196,365 (or approximately 2.7% of our to
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 21–25)
What This Means (2025 FDD)
According to Expense Reduction Analysts's 2025 Franchise Disclosure Document, 'Required Purchases' are defined as the products or services that Expense Reduction Analysts requires a franchisee to purchase or lease from an Approved Supplier, or to purchase or lease according to their standards and specifications. These purchases are estimated to be less than 2.5% of the total costs for establishing the Consulting Business and less than 2.0% of the ongoing costs to operate the business after the initial start-up phase. Expense Reduction Analysts reserves the right to derive revenue from these Required Purchases. For the fiscal year ending December 31, 2024, Expense Reduction Analysts generated $196,365 from these purchases, which is approximately 2.7% of their total revenue of $7,207,289.
Expense Reduction Analysts maintains the right to designate sources, including affiliated entities, for additional goods and services in the future, and may receive revenue, rebates, commissions, or other material consideration from franchisee purchases. While not a required purchase, Expense Reduction Analysts will also review and help administer Approved Services to ERA Threshold Accounts, while their affiliate will do the same with respect to ERAC Accounts.
As of the date of the 2025 Franchise Disclosure Document, Expense Reduction Analysts and/or their affiliates are the only Approved Supplier for the Proprietary Software, email accounts, document signing services, and technology covered as part of the Technology Fee. The Proprietary Software includes SpendVue, a tool used to assist in presenting savings opportunities to customers, and SourceVue, the approved secure vendor/supplier communication channel for procurement and requests for proposals. The fees for SpendVue are paid to Expense Reduction Analysts and may be reimbursable from Marketing Fund Contributions. Expense Reduction Analysts may develop or substitute other proprietary products, including private-label products bearing their Marks, and require franchisees to purchase these items from them or their affiliates.