Here were continuing with dissecting the items in the Franchise Disclosure Document (FDD) and we are reviewing the basics of Section/Item 8.
We want to start with one clarification. One of our listeners actually made us aware of a correction that we probably should make, we've been referring in the FDD to the different parts of it as sections. The reality of it is one of those things that we’ve seen in different terms, but most people refer to them as items. So we're going to refer to them as sections slash items or items slash sections. So anyway, we just wanted to make that clear before we dig into further sections/items within the FDD.
So item number 8 is the restrictions on the sources of products and services. And basically, section/item 8 tells whether the franchise limits the suppliers from whom a franchisee can purchase goods. Overall, this has two parts to it. One is they must disclose if there are restrictions, and we certainly know about this from our franchise, and they must also disclose whether or not they are economically benefiting from those purchases in the section.
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