If an Angry Chickz franchisee purchases from a designated supplier, does that supplier have to be the cheapest option?
Angry_Chickz Franchise · 2025 FDDAnswer from 2025 FDD Document
You must purchase authorized ingredients, products and services from: (i) us or our affiliates (if they sell or provide the same); (ii) suppliers designated by us; (iii) suppliers approved by us; or (iv) suppliers selected by you and with our prior written approval.
We and our affiliates may derive revenue and profit based on your purchases and leases, including from charging you for products and services that we or our affiliates provide to you. We and our affiliates may be the sole designated supplier of certain goods and services. Our affiliate Angry Chickz Distribution
We may disapprove a proposed supplier for any reason, including if, in our opinion the approval of the proposed supplier would disrupt or adversely impact our national or regional distribution arrangements.
We may revoke our approval of a supplier at any time.
We and our affiliates may collect or receive rebates, allowances, credits or other consideration in the form of cash or services or otherwise from Suppliers based on purchases or sales by franchisees. We and our affiliates may derive revenue from third party suppliers based upon your purchases. We and our affiliates reserve the right to derive revenue and other material consideration, from promotional allowances, volume discounts and other payments by suppliers that we designate, approve or recommend for some or all of our franchises.
As a further condition of its approval, we may require a Proposed Supplier to agree in writing: (i) to faithfully comply with our specifications and requirements relating to product quality, prices, consistency, warranty, reliability, financial capability, labor relations, customer relations, frequency of delivery, concentration of purchases, standards of service (including prompt attention to complaints), and/or other criteria, (ii) to offer and sell goods or services bearing or using the Marks only to licensees and franchisees of ours and only pursuant to a trademark license agreement in form prescribed by us, (iii) to provide to us duplicate purchase invoices for our records and inspection purposes and (iv) to otherwise comply with our reasonable requests.
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 18–23)
What This Means (2025 FDD)
According to the 2025 Angry Chickz Franchise Disclosure Document, the FDD does not explicitly state that designated suppliers must be the cheapest option. However, Angry Chickz retains significant control over the approval and disapproval of suppliers. Franchisees must purchase authorized ingredients, products, and services from Angry Chickz or its affiliates, designated suppliers, approved suppliers, or suppliers selected by the franchisee with Angry Chickz's prior written approval. This indicates that while franchisees have some choice, Angry Chickz has the final say.
Angry Chickz may disapprove a proposed supplier for any reason, including if the approval would disrupt or adversely impact national or regional distribution arrangements. They may also revoke approval of a supplier at any time. This gives Angry Chickz considerable leverage in determining which suppliers franchisees can use. The FDD also mentions that Angry Chickz and its affiliates may collect rebates, allowances, credits, or other consideration from suppliers based on franchisee purchases, which could incentivize them to favor certain suppliers over others.
Furthermore, as a condition of approval, Angry Chickz may require a proposed supplier to agree in writing to comply with their specifications and requirements relating to product quality, prices, consistency, warranty, reliability, financial capability, labor relations, customer relations, frequency of delivery, concentration of purchases, standards of service, and other criteria. This suggests that while price is a consideration, it is not the only factor. Other factors such as product quality, reliability, and service standards also play a significant role in the approval process.
Prospective Angry Chickz franchisees should inquire about the specific criteria used to evaluate and approve suppliers, and how much weight is given to price versus other factors like quality and reliability. Understanding these criteria will help franchisees make informed decisions about their purchasing options and manage their costs effectively.