you are correct to certain degree.
All franchisees open what's called a corporate account with a supplier and they also provide personal guarantees.
the tricky thing is when you have say 1000 franchisees all using one supplier and some can't pay there accounts on time or at all. this creates an issue for the franchisor and imo they could be on the hook as they need to keep supply up to all franchisees.
I like RFG, page-67
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