Is Fly To Fit allowed to charge a markup for administering payments to vendors?
Fly_To_Fit Franchise · 2024 FDDAnswer from 2024 FDD Document
Fly To Fit Franchise may negotiate prices and terms with vendors on behalf of the System.
Fly To Fit Franchise may receive rebates, payments or other consideration from vendors in connection with purchases by franchisees.
Fly To Fit Franchise has the right (but not the obligation) to collect payments from Franchisee on behalf of a vendor and remit the payments to the vendor and to impose a reasonable markup or charge for administering the payment program.
Source: Item 22 — CONTRACTS (FDD page 44)
What This Means (2024 FDD)
According to Fly To Fit's 2024 Franchise Disclosure Document, Fly To Fit has the right, but not the obligation, to collect payments from franchisees on behalf of a vendor. If Fly To Fit chooses to administer this payment program, they can impose a reasonable markup or charge for doing so.
This means that Fly To Fit franchisees could potentially face an additional cost in the form of a markup when Fly To Fit handles payments to vendors on their behalf. The FDD does not specify what would be considered a 'reasonable' markup, so it is important for prospective franchisees to clarify this with Fly To Fit during their due diligence.
This arrangement could benefit franchisees by simplifying payment processes, but it also introduces a potential cost factor that franchisees need to consider in their financial planning. Franchisees should evaluate whether the convenience of Fly To Fit handling vendor payments outweighs the cost of the markup fee.