Can 1 800 Packouts charge a testing fee to a supplier proposed by a franchisee?
1_800_Packouts Franchise · 2025 FDDAnswer from 2025 FDD Document
If you propose to purchase any brand, type, and/or model of products, supplies, services, and Operating Assets which is not then approved by us, you will first notify us and will submit to us, on our request, sufficient written specifications, photographs, drawings, samples, and/or other information for a determination by us of whether the brand, type, and/or model of products, supplies, services, and Operating Assets complies with our specifications and standards, which determination will be made and communicated to you within a reasonable time.
We do not make our criteria for approving suppliers available to franchisees.
We may approve or disapprove a supplier or item in our sole discretion.
We may charge the supplier a reasonable testing fee and will decide within a reasonable time after receiving the required information whether you may purchase items from such supplier.
Upon our approval of your proposed item and/or supplier, we will permit you to contract with the alternative supplier.
We may revoke approval of a supplier or a particular item at any time in our sole discretion by notifying you and/or the supplier.
Source: Item 23 — RECEIPT (FDD pages 67–238)
What This Means (2025 FDD)
According to 1 800 Packouts's 2025 Franchise Disclosure Document, if a franchisee proposes a new supplier, 1 800 Packouts has the right to charge that supplier a reasonable testing fee. This fee would presumably cover the costs 1 800 Packouts incurs to evaluate whether the proposed supplier meets their standards. 1 800 Packouts will then decide within a reasonable time whether the franchisee can purchase from the proposed supplier.
This policy allows 1 800 Packouts to maintain quality control and consistency across its franchise system by ensuring that all suppliers meet their standards. However, it also means that franchisees may face additional costs and delays if they wish to use a supplier not already approved by 1 800 Packouts. The franchisee does not have any control over the amount of the testing fee, only that it is "reasonable."
It is important to note that 1 800 Packouts does not disclose its criteria for approving suppliers to franchisees. This lack of transparency could make it difficult for franchisees to anticipate whether a proposed supplier will be approved. 1 800 Packouts retains the sole discretion to approve or disapprove any supplier or item.
If the proposed item and/or supplier is approved, the franchisee will be allowed to contract with the alternative supplier. 1 800 Packouts also retains the right to revoke approval of a supplier or a particular item at any time by notifying the franchisee and/or the supplier.