Is Fly To Fit permitted to implement a centralized purchasing system?
Fly_To_Fit Franchise · 2024 FDDAnswer from 2024 FDD Document
- 8.4 Purchasing. 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.
Fly To Fit Franchise may implement a centralized purchasing system.
Fly To Fit Franchise may establish a purchasing cooperative and require Franchisee to join and participate in the purchasing cooperative on such terms and conditions as Fly To Fit Franchise may determine.
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 to implement a centralized purchasing system. This means Fly To Fit can establish a system where franchisees are required to purchase goods and services through a central entity or process managed by Fly To Fit.
Fly To Fit also has the option to establish a purchasing cooperative that franchisees would be required to join and participate in, under the terms and conditions set by Fly To Fit. Additionally, Fly To Fit may negotiate prices and terms with vendors on behalf of the entire franchise system. Fly To Fit is also allowed to receive rebates, payments, or other forms of compensation from vendors based on franchisee purchases.
Fly To Fit also has the right to collect payments from franchisees on behalf of vendors and remit those payments to the vendors. Fly To Fit can also impose a reasonable markup or charge for administering this payment program. This gives Fly To Fit significant control over the supply chain and purchasing activities within the franchise system, potentially impacting franchisees' costs and vendor relationships.