Does Mr. Sandless derive revenue from sales of items to its franchisees?
Mr_Sandless Franchise · 2025 FDDAnswer from 2025 FDD Document
h us are subject to a 10% administrative fee over our cost.
We will derive revenue from sales of items to our franchisees. We may also sell or lease certain other supplies, products and services ourselves and, if we do, we will derive revenue from those sales. To streamline the process, our manufacturer of our supplies collects our 10% service fee on our behalf (see Item 6 In the year ended December 31, 2024, we derived $ 277,344.28 (18%) of our total gross revenues of $ 1,516,126.42 from required franchisee purchases, including convention fees, administration fees, ad fund fees, franch
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 15–18)
What This Means (2025 FDD)
According to Mr. Sandless's 2025 Franchise Disclosure Document, Mr. Sandless does derive revenue from the sale of items to its franchisees. Mr. Sandless may be an approved supplier, but not the only approved supplier, of equipment, tools, inventory, job tins, and uniforms, but franchisees are not required to purchase these items from them. Mr. Sandless is currently the only approved supplier for the Franchise Starter Kit, invoices and after care packs. All supplies ordered through Mr. Sandless are subject to a 10% administrative fee over their cost.
In the year ended December 31, 2024, Mr. Sandless derived $277,344.28, which is 18% of their total gross revenues of $1,516,126.42, from required franchisee purchases. These purchases include convention fees, administration fees, ad fund fees, franchise kit, toll-free number fee, Gmail, materials, and supplies. This indicates that a portion of Mr. Sandless's revenue is directly tied to the sale of essential items and services that franchisees are obligated to purchase.
The FDD also states that the costs of purchases from designated or approved sources, or according to their standards and specifications, will range from 40% to 80% of the total cost of establishing the business, and approximately 5% to 7% of the total cost of operating the business. This highlights the financial significance of these required purchases for franchisees, both during the initial setup and ongoing operations. Mr. Sandless also reserves the right to earn rebates, commissions, or other forms of compensation from their approved suppliers based on sales to franchisees, although they do not currently receive these forms of compensation.
Prospective franchisees should carefully consider the implications of these required purchases and the associated costs. Understanding the specific items that must be purchased from Mr. Sandless, the 10% administrative fee, and the overall percentage of revenue derived from these sales is crucial for assessing the financial viability of the franchise. Additionally, franchisees should inquire about the potential for future rebates or commissions that Mr. Sandless may receive from suppliers, as this could impact the overall cost structure and profitability of the franchise.