Does Face Foundrie place any restrictions on how it uses the monies it receives from authorized suppliers?
Face_Foundrie Franchise · 2025 FDDAnswer from 2025 FDD Document
In addition to the above, we and our affiliates have the right to receive payments or other benefits like rebates, discounts and allowances from authorized suppliers based upon their dealings with you and other franchisees and we may use the monies we receive without restriction for any purpose we deem appropriate or necessary. 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 10% of the purchases you make from the vendor. We may receive payments from a supplier as a condition of our approval of that supplier. We do not provide any material benefits to you, such as the grant of additional franchises and/or territories, based on your use of designated or approved suppliers. There are currently no purchasing or distribution cooperatives in our System. We have negotiated price terms with some suppliers. In addition, in the future various vendors and suppliers may contribute to the cost of any annual franchise convention for the System through rebates, contributions or purchasing booths at the convention. We negotiate supply arrangements with suppliers for the benefit of franchisees, and may continue to do so in the future.
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 27–31)
What This Means (2025 FDD)
According to Face Foundrie's 2025 Franchise Disclosure Document, Face Foundrie and its affiliates have the right to receive payments or other benefits, such as rebates, discounts, and allowances, from authorized suppliers based on their dealings with franchisees. Face Foundrie has the right to use these monies without restriction for any purpose they deem appropriate or necessary. Face Foundrie also reserves the right to receive payments from authorized suppliers that they retain as profit related to their dealings with franchisees and the Face Foundrie system. Suppliers may pay Face Foundrie based upon the quantities of products the system purchases from them.
These payments are usually based upon an amount per unit or percentage rebate, and generally range from 2% to 10% of the purchases franchisees make from the vendor. Face Foundrie may also receive payments from a supplier as a condition of their approval of that supplier. However, Face Foundrie does not provide any material benefits to franchisees, such as the grant of additional franchises and/or territories, based on their use of designated or approved suppliers.
This means that Face Foundrie benefits financially from the relationships between its franchisees and approved suppliers, and it has broad discretion over how it uses those funds. While this is a common practice in franchising, prospective franchisees should be aware that a portion of their purchases from approved suppliers ultimately benefits Face Foundrie. The FDD states that Face Foundrie negotiates supply arrangements with suppliers for the benefit of franchisees and may continue to do so in the future.