For what purpose may Fitstop use the amounts received from 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 payments due to the suppliers' dealings with Fitstop, its franchisees, or other franchised businesses within the Fitstop system.
Fitstop has the discretion to use these amounts received from suppliers for any purpose they deem appropriate. This means Fitstop is not obligated to use the funds to directly benefit franchisees or the system as a whole, although they may choose to do so.
This arrangement is common in franchising, where franchisors negotiate with suppliers and receive compensation. However, it's important for prospective Fitstop franchisees to understand that Fitstop has broad discretion over how these funds are used, and there is no guarantee that the funds will be reinvested into the franchise system or used to lower costs for franchisees. Fitstop states that neither they nor their affiliates derived any rebates/consideration from any third-party suppliers or providers – or any other revenue – over their respective past fiscal year(s) ending December 31, 2023.