Does 1 800 Packouts require franchisees to participate in purchasing or distribution cooperatives?
1_800_Packouts Franchise · 2025 FDDAnswer from 2025 FDD Document
You agree to participate in any purchasing or distribution cooperatives that we may establish.
- (2) 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.
- (3) We and our affiliates have the right to receive payments from suppliers on account of their actual or prospective dealings with you and other franchisees and to use all amounts they receive without restriction for any purposes they deem appropriate.
You also understand that, if we or our affiliates sell items to you, we and they may make a reasonable profit on the items.
C. SYSTEM STANDARDS
Source: Item 23 — RECEIPT (FDD pages 67–238)
What This Means (2025 FDD)
According to the 2025 1 800 Packouts Franchise Disclosure Document, franchisees are required to participate in any purchasing or distribution cooperatives that 1 800 Packouts may establish. This means that if 1 800 Packouts sets up a cooperative for purchasing or distributing products, supplies, or services, franchisees must join and actively participate in it.
1 800 Packouts maintains the right to require franchisees to purchase or lease products, supplies, services, and operating assets that meet the franchisor's specifications. These specifications can include minimum standards for quantity, design, appearance, function, performance, serviceability, and warranties. These items may need to be a specific brand, kind, or model and be purchased or leased only from approved suppliers or service providers, or even from a single designated source, which could include 1 800 Packouts, its affiliates, or a buying cooperative organized by them.
1 800 Packouts publishes its requirements for approved suppliers or service providers in its manuals. If a franchisee wants to use a product, supply, service, or operating asset that isn't already approved, they must notify 1 800 Packouts and submit detailed information for the franchisor to determine if it meets their standards. 1 800 Packouts does not disclose the criteria for approving suppliers to franchisees and retains the sole discretion to approve or disapprove a supplier or item. They can also revoke approval at any time. 1 800 Packouts and its affiliates have the right to receive payments from suppliers based on their dealings with franchisees and can use these amounts without restriction.