What forms of compensation might Fitstop and/or its affiliates receive from Approved Suppliers?
Fitstop Franchise · 2024 FDDAnswer from 2024 FDD Document
We and/or our affiliates may receive payments or other compensation from Approved Suppliers or any other suppliers on account of these suppliers' dealings with us, you, or other Franchised Businesses in the System, such as rebates, commissions or other forms of compensation. We may use any amounts that we receive from suppliers for any purpose that we deem appropriate. We and/or our affiliates may negotiate supply contracts with our suppliers under which we are able to purchase products, equipment, supplies, services and other items at a price that will benefit us and our franchisees. As noted above in this Item, neither we nor our affiliate(s) derived any rebates/consideration from any third-party suppliers or providers – or any other revenue – over our respective past fiscal year(s) ending December 31, 2023.
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 19–23)
What This Means (2024 FDD)
According to Fitstop's 2024 Franchise Disclosure Document, Fitstop and its affiliates may receive compensation from approved suppliers in the form of rebates, commissions, or other forms of compensation. This compensation is tied to the suppliers' dealings with Fitstop, its franchisees, or other franchised businesses within the Fitstop system. Fitstop retains the right to use these amounts for any purpose they deem appropriate.
Fitstop may also negotiate supply contracts with suppliers to purchase products, equipment, supplies, services, and other items at a price that benefits both Fitstop and its franchisees. However, the FDD notes that neither Fitstop nor its affiliates derived any rebates/consideration from any third-party suppliers or providers, or any other revenue, over their respective past fiscal years ending December 31, 2023.
This arrangement is common in franchising, where franchisors leverage their system-wide purchasing power to negotiate favorable terms with suppliers. For a prospective Fitstop franchisee, this means that while they may be required to purchase certain items from approved suppliers, Fitstop may be benefiting financially from these arrangements. It is important to note that Fitstop has the discretion to use the received compensation for any purpose, which may or may not directly benefit the franchisees.