How do the restrictions on suppliers for All County in Item 8 relate to the estimated initial investment in Item 7?
All_County Franchise · 2025 FDDAnswer from 2025 FDD Document
d suppliers for any products or services.
Approved Suppliers. We may require that you purchase all specified services and products from us, our affiliate, or our designated approved supplier, as we may specify periodically to you during the term of the Franchise Agreement. Approved suppliers and specifications are determined based on the current needs for operating the Franchise Business. We evaluate approved suppliers based on price, service, quality, and other commercially reasonable benchmarks. The identity of approved suppliers and these specifications are updated periodically in writing by modifying the appropriate sections of the Operations Manual. We will send you modified sections by updating our web site, through the United States mail, or by any other commercially reasonable means.
Proposed Suppliers. We have procedures in our Operations Manual for approving vendors and suppliers you propose. It takes up to 90 days to evaluate new vendors or suppliers. We may approve or disapprove any supplier, and we may approve a supplier conditionally, provided however, that approval will not be unreasonably withheld. If you propose to use any brand and/or supplier that is not then approved by us, then you must first notify us in writing. You must submit sufficient information, specifications and samples concerning the brand and/or supplier so that we can decide whether the brand complies with our specifications and standards and/or such supplier meets our approved supplier criteria. In evaluating any supplier you propose, we will, subject to reasonable restrictions and conditions to protect our trade secrets and confidential information, disclose to the proposed supplier applicable standards, specifications, processes, and procedures for the item in sufficient detail to enable the proposed supplier to demonstrate fully its capacity and capabilities to supply the items. Within 90 days after we receive all requested information, we will communicate to you in writing our decision to approve or disapprove your proposed supplier.
We may prescribe procedures for the submission of requests for approval and impose obligations on approved suppliers, which will be incorporated in a written license agreement with the supplier. We may obtain from you and/or the approved supplier's reimbursement of our reasonable costs and expenses incurred in the approval process and on-going monitoring of the supplier's compliance with our requirements. We do not act as an agent, representative or in any other intermediary or fiduciary capacity for you in our relationship with an alternative supplier you propose and we approve. We may impose limits on the number of approved suppliers. We have the right to monitor the quality of goods or services provided by approved suppliers in a manner we deem appropriate and may terminate any supplier who does not meet our quality standards and specifications, as may be periodically in effect.
What This Means (2025 FDD)
According to All County's 2025 Franchise Disclosure Document, Item 8 outlines restrictions on approved suppliers, which directly impacts several categories within the estimated initial investment detailed in Item 7. All County franchisees may be required to purchase specific services and products from All County, its affiliates, or designated approved suppliers. These approved suppliers and their specifications are determined based on the current needs for operating the franchise business, with evaluations based on price, service, quality, and other commercially reasonable benchmarks. The identity of these suppliers and specifications are periodically updated in the Operations Manual.
Specifically, Item 7 lists several investment categories where purchases from approved suppliers are either required or likely. These include leasehold improvements ($0 - $2,000), signs ($250 - $1,000), capital equipment and supplies ($1,500 - $5,000), and technology, office equipment, and supplies ($1,500 - $4,500). The FDD notes that the payments for these categories are arranged directly with the approved suppliers. This means that franchisees must factor in All County's approved supplier requirements when budgeting for these initial investments.
All County also outlines procedures for franchisees to propose new vendors or suppliers, with an evaluation period of up to 90 days. All County may approve or disapprove any supplier, and may do so conditionally. Franchisees are required to notify All County in writing and submit sufficient information for evaluation. This process ensures that all suppliers meet All County's standards and specifications, which can impact a franchisee's ability to source cheaper or preferred alternatives, potentially affecting their initial and ongoing costs. The FDD states that the total estimated proportion of all required purchases and leases in relation to all purchases and leases a franchisee will make in establishing the business is 10% to 12%. The total estimated proportion of all required purchases and leases in relation to all purchases and leases a franchisee will make in operating the business is less than 30%.
Furthermore, franchisees are required to maintain specific insurance policies from carriers approved by All County, which includes commercial general liability, property insurance, and other policies like errors and omissions insurance and worker's compensation. The cost of insurance is estimated between $2,500 and $3,500 for the first year. The restrictions on insurance providers add another layer of required purchases that influence the initial investment. All County retains the right to monitor the quality of goods and services provided by approved suppliers and may terminate any supplier who does not meet their standards, ensuring consistency but potentially limiting a franchisee's options and cost-saving opportunities.