What is the exception to the requirement that Fly To Fit account for and transmit benefits received from a franchisee's transactions, as outlined in the Indiana Rider?
Fly_To_Fit Franchise · 2024 FDDAnswer from 2024 FDD Document
- (4) Allowing the franchisor to obtain money, goods, services, or any other benefit from any other person with whom the franchisee does business, on account of, or in relation to, the transaction between the franchisee and the other person, other than for compensation for services rendered by the franchisor, unless the benefit is promptly accounted for, and transmitted to the franchisee.
Source: Item 23 — RECEIPTS (FDD pages 44–134)
What This Means (2024 FDD)
According to Fly To Fit's 2024 Franchise Disclosure Document, the Indiana Rider addresses specific modifications to the standard franchise agreement to ensure compliance with Indiana law. One key provision relates to benefits Fly To Fit might receive from a franchisee's business dealings with other parties.
Specifically, Fly To Fit is generally required to account for and transmit any money, goods, services, or other benefits they receive from a third party due to the franchisee's transactions with that third party. However, there's an exception: this requirement does not apply to compensation for services that Fly To Fit directly renders.
In simpler terms, if Fly To Fit provides a service to the franchisee and receives payment or benefits for that service, they don't have to account for and transmit those benefits back to the franchisee. This exception ensures that Fly To Fit can be compensated for legitimate services they provide without being subject to the pass-through requirement. This is a fairly standard clause that allows the franchisor to be directly compensated for services rendered to the franchisee.