If a franchisee proposes a new supplier for the Anago system, who pays for the inspection and testing?
Anago Franchise · 2025 FDDAnswer from 2025 FDD Document
or supplies when they are utilized outside the Anago System. We may designate a supplier where a Franchisee may go and buy supplies and charge the supplies to the House Account. If you use the House Account to purchase supplies and elect to have your purchases deducted from your statement each month, we will charge you a financing fee of 5.25% of the amount charged.
- (c) Approval of New Specifications and Suppliers. If You propose to purchase or lease any equipment, supplies, advertising materials, or other products or services, for use within the Anago System, from an unapproved supplier, You must submit to Us a written request for approval, or request the supplier to do so. We will have the right to require, as a condition of Our approval that Our representatives be permitted to inspect the supplier's facilities, and that samples from the supplier be delivered, at Our option, either to Us or to an independent, certified laboratory We designate for testing. We are not liable for damage to any sample that results from the testing
process. You will pay a charge not to exceed the reasonable cost of the inspection and the actual cost of the testing. We reserve the right, at Our option, to re-inspect the facilities and products of any approved supplier and continue to sample the products at the supplier's expense and to revoke approval upon the supplier's failure to continue to meet Our standards and specifications.
Source: Item 23 — RECEIPTS (FDD pages 62–298)
What This Means (2025 FDD)
According to Anago's 2025 Franchise Disclosure Document, if a franchisee proposes a new supplier for equipment, supplies, advertising materials, or other products/services, the franchisee will pay for the inspection and testing costs associated with the approval process. Specifically, the franchisee will pay a charge not to exceed the reasonable cost of the inspection and the actual cost of testing.
Anago retains the right to inspect the supplier's facilities and request samples for testing, either by Anago or an independent, certified laboratory. Anago is not liable for any damage to the sample during the testing process. Furthermore, Anago reserves the right to re-inspect the facilities and products of any approved supplier and continue to sample the products at the supplier's expense to ensure ongoing compliance with Anago's standards.
This requirement ensures that all suppliers meet Anago's standards and specifications, maintaining quality and consistency across the franchise system. Additionally, Anago may require the supplier to provide evidence of insurance, such as product liability insurance, to protect Anago and its franchisees against claims arising from the use of the supplier's products within the Anago system. The estimated cost for testing and inspection is between $100 and $500.
This policy is fairly standard in franchising, as franchisors need to maintain quality control over their brand. Prospective franchisees should factor these potential costs into their budget if they anticipate wanting to use suppliers not already approved by Anago.