What is the All States M.E.D. franchisor's right regarding the review of approval of items or suppliers?
All_States_M_E_D Franchise · 2024 FDDAnswer from 2024 FDD Document
ll 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 b
Source: Item 23 — RECEIPTS (FDD pages 44–174)
What This Means (2024 FDD)
According to the 2024 All States M.E.D. Franchise Disclosure Document, All States M.E.D. retains the right to periodically review its approval of any items or suppliers. This means that even if a product, service, or supplier has been previously approved for use within the All States M.E.D. franchise system, All States M.E.D. can re-evaluate and potentially revoke that approval.
This power allows All States M.E.D. to maintain quality control and uniformity across its franchise locations. If All States M.E.D. revokes approval of an item, service, or supplier, franchisees must promptly stop using, selling, or providing the disapproved items or services at their own expense.
This clause has significant implications for franchisees, as they may need to switch suppliers or discontinue offering certain products or services if All States M.E.D. changes its approved list. Franchisees are also responsible for covering the costs associated with adopting these changes. All States M.E.D. also has the right to designate certain products and services to be offered locally or regionally based on factors they determine, including franchisee qualifications, test marketing, and regional or local differences.
All States M.E.D. can also allow one or more franchisees to provide 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 Franchisee to provide the same products or services. All States M.E.D. also retains any volume rebates, markups, and other benefits from suppliers, and franchisees have no entitlement to these benefits.