Does Fitstop have to share rebates received from suppliers with its franchisees?
Fitstop Franchise · 2024 FDDAnswer from 2024 FDD Document
- 12.4.6 Rebates. You acknowledge that we may negotiate and/or receive rebates or other financial incentives from the manufacturers and suppliers of any Required Items and/or Approved Products that a System franchisee must acquire and/or offer for sale at the Premises or otherwise in connection with the Franchised Business.
You agree that we may retain for our own benefit all rebates or payments received from any Approved Suppliers and/or other providers/suppliers, whether or not such rebates or payments are made as a consequence of purchases by you.
Source: Item 23 — RECEIPTS (FDD pages 50–135)
What This Means (2024 FDD)
According to Fitstop's 2024 Franchise Disclosure Document, Fitstop is not required to share any rebates or financial incentives they receive from suppliers with their franchisees. The FDD states that Fitstop may negotiate and/or receive rebates from manufacturers and suppliers of required items or approved products that a franchisee must acquire or offer for sale.
Fitstop retains the right to keep all rebates or payments received from approved suppliers or other providers, regardless of whether these rebates or payments result from franchisee purchases. This means that any financial benefits Fitstop gains through supplier agreements do not have to be passed on to the franchisees.
This policy is fairly common in franchising, as franchisors often negotiate bulk discounts or rebates based on the purchasing power of the entire franchise network. However, it's important for prospective Fitstop franchisees to understand that they will not directly benefit from these negotiated rebates, as Fitstop keeps them for its own benefit. Franchisees should consider this when evaluating the overall cost and potential profitability of a Fitstop franchise.