What costs associated with a Proposed Supplier is an Angry Chickz franchisee responsible for?
Angry_Chickz Franchise · 2025 FDDAnswer from 2025 FDD Document
If Franchisee desires to purchase or use any ingredients, products or services for or at the Franchised Business that Company has not yet evaluated, or purchase any product or service from a person or Entity (a "Proposed Supplier") that Company has not yet approved (for ingredients, products and services that Company requires Franchisee to purchase only from designated or approved suppliers), Franchisee first agrees to submit sufficient information, specifications and samples for Company to determine whether the ingredient, product or service complies with the Standards and specifications and the proposed supplier meets Company's criteria.
For each Proposed Supplier, Franchisee shall first deliver written notice seeking approval, which notice shall: (a) identify the name and address of the Proposed Supplier, (b) contain such information as may be requested by Company or required in the Manual(s) (which may include financial, operational and economic information regarding its business and product), and (c) identify the products and/or services desired to be purchased or obtained through the Proposed Supplier.
Franchisee or the Proposed Supplier must pay Company in advance (or upon Company's request, reimburse) Company's reasonably anticipated costs to review the Proposed Supplier's application and all current and future reasonable costs and expenses, to inspect and audit the Proposed Suppliers' facilities, equipment, and all product testing costs paid by Company to third parties.
Upon request, Company will furnish to Franchisee the general, but not manufacturing specifications for nonproprietary products and services if specifications are not contained in the Manual(s).
Company may request that the Proposed Supplier furnish Company, at no cost to Company, product samples, specifications and such other information as Company may require.
Source: Item 22 — CONTRACTS (FDD page 54)
What This Means (2025 FDD)
According to the 2025 Angry Chickz Franchise Disclosure Document, if a franchisee wants to use a supplier that Angry Chickz hasn't already approved, the franchisee is responsible for covering the costs associated with the review and approval process. This includes the costs for Angry Chickz to review the supplier's application, inspect and audit the supplier's facilities and equipment, and cover any product testing costs that Angry Chickz pays to third parties. These costs must be paid in advance or reimbursed to Angry Chickz upon request.
This means that before a franchisee can use a new supplier, they need to be prepared to potentially pay for these evaluation costs. The FDD specifies that these costs must be reasonable, but it's important for a prospective franchisee to understand that these expenses can add up, especially if the supplier is located far away or if extensive product testing is required. It is also important to note that Angry Chickz may request the Proposed Supplier furnish product samples, specifications, and other information at no cost to Angry Chickz.
This requirement is fairly standard in franchising, as franchisors need to ensure that all suppliers meet their quality and operational standards to protect the brand's reputation. However, the financial burden on the franchisee can vary depending on the franchisor's policies and the complexity of the approval process. Therefore, it is crucial for a potential Angry Chickz franchisee to discuss these potential costs with the franchisor and understand the criteria for supplier approval before entering into a franchise agreement.
In summary, while Angry Chickz allows franchisees to propose their own suppliers, the franchisee bears the financial responsibility for ensuring that these suppliers meet the franchisor's standards. This includes covering the costs of application review, facility inspections, audits, and product testing, which can impact the franchisee's operating expenses.