Can All States M.E.D. franchisor revoke approval of items or suppliers?
All_States_M_E_D Franchise · 2024 FDDAnswer from 2024 FDD Document
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13.1.1 Franchisee acknowledges that the reputation and goodwill of the System is based in large part on offering high quality products and services to its customers. Accordingly, Franchisee shall provide or offer for sale or use at the Franchised Business only those services, with the greatest diligence and care
by Franchisee, that Franchisor approves (and which are not thereafter disapproved) and that comply with Franchisor's specifications and quality standards. If required by Franchisor, any such items or services shall be purchased only from Franchisor. Franchisor shall maintain inventory levels for all supplies offered solely by Franchisor at a level sufficient to ensure prompt delivery to all Franchisees. Franchisee shall NOT offer for sale, sell or provide through the Franchised Business or from the Franchised Business any products or services that Franchisor has not approved. Furthermore, Franchisee must offer for sale all services and products currently offered by Franchisor or which will be offered by the Franchisor in the future.
- 13.1.2 Notwithstanding anything contrary in this Agreement, Franchisor has the right to review from time to time its approval of any items or suppliers. Franchisor may revoke its approval of any item, service or supplier at any time by notifying Franchisee and/or the supplier. Franchisee shall, at its own expense, promptly cease using, selling or providing any items or services disapproved by Franchisor. The cost to review a new product or service as proposed by Franchisee shall not exceed $1,000.00 per product or service.
- 13.1.3 Franchisor has the right to designate certain products and services, not otherwise authorized for general use as part of the System, to be offered locally or regionally based upon such factors as Franchisor determines including, but not limited to, franchisee qualifications, test marketing and regional or local differences. Franchisor has the right to give its consent to one (1) or more franchisees to provide certain products or services not authorized for general use as part of the System. Such consent will be based upon the factors in Section 10.4 and shall not create any rights in Franchisee to provide the same products or services.
- 13.1.4 Franchisor has the right to retain volume rebates, markups, and other benefits from suppliers or in connection with the furnishing of supplies. Franchisee shall have no entitlement to or interest in any such benefits.
- 13.1.5 Franchisor shall provide Franchisee, in the Operations Manual or other written or electronic form, with a list of specifications and, if required, a list of Approved Suppliers for some or all of the supplies, furniture, fixtures, inventory, equipment and other approved or specified items and services, and Franchisor may from time to time issue revisions to such list. If Franchisor or an Affiliate is an Approved Supplier, Franchisee shall execute a standard form purchase or supply agreement for the items to be supplied by Franchisor or its Affiliate. If Franchisee desires to utilize any products, services or new technology that Franchisor has not approved (for products and services that require supplier approval), Franchisee shall first send Franchisor sufficient information, specifications and samples for Franchisor to determine whether the service or product complies with its standards and specifications or whether the supplier meets its Approved Supplier criteria. Franchisee shall bear all expenses incurred by Franchisor in connection with determining whether it shall approve an item, service or supplier, not to exceed $1,000.00. Franchisor will decide within a reasonable time (usually thirty [30] days) after receiving the required information whether Franchisee may purchase or lease such items or services or from such supplier. Approval of a supplier may be conditioned on the supplier's ability to provide sufficient quantity of product; quality of prod
Source: Item 23 — RECEIPTS (FDD pages 44–174)
What This Means (2024 FDD)
According to All States M.E.D.'s 2024 Franchise Disclosure Document, All States M.E.D. has the right to review and revoke approval of items or suppliers. Specifically, All States M.E.D. may revoke its approval of any item, service, or supplier at any time by notifying the franchisee and/or the supplier. The franchisee is then required to promptly cease using, selling, or providing any disapproved items or services at their own expense.
This clause gives All States M.E.D. significant control over the products and services offered at the franchise. While franchisees can propose new products or services, All States M.E.D. has the final say on what is offered. The cost to review a new product or service as proposed by the franchisee will not exceed $1,000 per product or service.
All States M.E.D. also has the right to designate certain products and services, not otherwise authorized for general use as part of the System, to be offered locally or regionally based upon factors determined by All States M.E.D., including franchisee qualifications, test marketing, and regional or local differences. All States M.E.D. may also consent to one or more franchisees providing certain products or services not authorized for general use as part of the System. This consent will be based upon factors in Section 10.4 and shall not create any rights in the franchisee to provide the same products or services.
Furthermore, All States M.E.D. retains the right to keep volume rebates, markups, and other benefits from suppliers related to furnishing supplies, with the franchisee having no entitlement to these benefits. All States M.E.D. will provide franchisees with a list of specifications and, if required, a list of Approved Suppliers in the Operations Manual or other written or electronic form, and may revise this list from time to time. If a franchisee desires to utilize any products, services, or new technology that All States M.E.D. has not approved, the franchisee must first send All States M.E.D. sufficient information, specifications, and samples for All States M.E.D. to determine whether the service or product complies with its standards and specifications or whether the supplier meets its Approved Supplier criteria. The franchisee will bear all expenses incurred by All States M.E.D. in connection with determining whether it shall approve an item, service, or supplier, not to exceed $1,000.00.