The goods are branded items, drink bottles, lunch boxes etc. There is a point in the disclosure document that is as follows:
“Whether the Franchisor, or an associate of the Franchisor will receive a rebate or other financial benefit from the supply of goods or services to Franchisees, including the name of the business providing the rebate or financial benefit”
Response:
“The Franchisor or it’s associate will receive commercial margins on product supplied directly to Franchisees.
The Franchisor obtains a 5% mark-up on the sale of equipment to new stores from the buying house which covers the Franchisor’s liability insurance and administration costs”
So the first part, is the Franchisor’s get out of jail free card to being able to double dip? If the franchisee requested would they have to disclose what commercial margins they get?
And the second part on equipment - if we have evidence that they are taking more than 5% mark-up on sales how much trouble can they get in?
Ultimately, we are trying to catch them out in order to rebrand and leave the franchise model. We know of other stores that have found ways but they can’t disclose how due to whatever deeds have been written up. This companies brand name is more important to the Franchisor and they seem to settle outside of court by allowing franchisees to leave the franchise, yet keep the premises and just rebrand.