Who is responsible for supplying franchisees?

A: When you own a New York franchise, your supplies may be provided by the franchisor. The franchisor may be the designated or sole supplier of a franchise, or they may be one of several approved suppliers. Furthermore, the franchisor may participate in negotiating supply and distribution contracts.

If a New York franchise business is a product-based program, naturally the franchisor will be the supplier of the franchise and provide the goods that are distributed through the program. In business format franchise systems, the supply chain is more complex, and a franchisor may decide not to be the supplier of a franchise.

As the supplier of a franchise, a franchisor must: 

• consider the terms and conditions of the sale of products and services;
• consider applying late charges or interest to past due accounts; and
• manage franchisee credit risk. 

As the supplier of a New York franchise, a franchisor should realize that a deficiency in supplies could jeopardize the franchisor/franchisee relationship. Therefore, they must organize and administer the supply program, by developing and modifying specifications and standards, and maintaining quality assurance programs with suppliers and distributors.

As the supplier of a franchise, a franchisor might receive a functional discount or payments for its activities.

If you are an entrepreneur who is interested in franchising your business there is a lot you need to know, including the significance of evaluating your trademark and how to approach the preparation of your Franchise Disclosure Document. For a limited time, get New York franchise lawyer Charles N. Internicola, Esq's franchise law report to determine whether your business is right for franchising. Contact us today at 1-800-976-4904 for more information about Mr. Internicola's franchise law services in New York and how he assists entrepreneurs franchise their business nationwide.

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