Can Fly To Fit require franchisees to purchase or lease Inputs from specific sources?
Fly_To_Fit Franchise · 2024 FDDAnswer from 2024 FDD Document
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ARTICLE 8. SUPPLIERS AND VENDORS
- 8.1 Generally. Franchisee shall acquire all Inputs required by Fly To Fit Franchise from time to time in accordance with System Standards. Fly To Fit Franchise may require Franchisee to purchase or lease any Inputs from Fly To Fit Franchise, Fly To Fit Franchise's designee, Required Vendors, Approved Vendors, and/or under Fly To Fit Franchise's specifications. Fly To Fit Franchise may change any such requirement or change the status of any vendor. To make such requirement or change effective, Fly To Fit Franchise shall issue the appropriate System Standards.
- 8.2 Alternate Vendor Approval. If Fly To Fit Franchise requires Franchisee to purchase a particular Input only from an Approved Vendor or Required Vendor, and Franchisee desires to purchase the Input from another vendor, then Franchisee must submit a written request for approval and any information, specifications and/or samples requested by Fly To Fit Franchise. Fly To Fit Franchise may condition its approval on such criteria as Fly To Fit Franchise deems appropriate, which may include evaluations of the vendor's capacity, quality, financial stability, reputation, and reliability; inspections; product testing, and performance reviews. Fly To Fit Franchise will provide Franchisee with written notification of the approval or disapproval of any proposed new vendor within 30 days after receipt of Franchisee's request.
- 8.3 Alternate Input Approval. If Fly To Fit Franchise requires Franchisee to purchase a particular Input, and Franchisee desires to purchase an alternate to the Input, then Franchisee must submit a written request for approval and any information, specifications and/or samples requested by Fly To Fit Franchise. Fly To Fit Franchise will provide Franchisee with written notification of the approval or disapproval of any proposed alternate Input within 30 days after receipt of Franchisee's request.
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 authority to mandate that franchisees acquire or lease required inputs from specific sources. These sources can include Fly To Fit itself, its designees, required vendors, approved vendors, or according to Fly To Fit's specific requirements. Fly To Fit also retains the right to modify these requirements or change the status of any vendor, with such changes being communicated through updated System Standards.
If Fly To Fit requires a franchisee to purchase a particular input from an approved or required vendor, and the franchisee wants to use a different vendor, they must submit a written request for approval. This request should include any information, specifications, or samples that Fly To Fit requires. Fly To Fit will then provide a written notification of approval or disapproval within 30 days of receiving the franchisee's request.
Fly To Fit may also negotiate prices and terms with vendors on behalf of the entire franchise system and may receive rebates, payments, or other considerations from vendors based on franchisee purchases. Fly To Fit has the option to collect payments from franchisees on behalf of a vendor, remit those payments, and impose a reasonable charge for administering this payment program. Additionally, Fly To Fit may implement a centralized purchasing system or establish a purchasing cooperative that franchisees may be required to join and participate in under terms set by Fly To Fit.
Fly To Fit states it will not be liable to the franchisee for any claims or losses related to products or services provided by approved or required vendors, including issues like defects, delays, or unavailability. Franchisees need to be aware of these stipulations regarding sourcing and vendor relationships, and should discuss vendor selection and liability with Fly To Fit prior to signing the franchise agreement.