What are the restrictions on suppliers for Augusta Lawn Care in Item 8, and how do they relate to the franchisee's obligations in Item 9?
Augusta_Lawn_Care Franchise · 2025 FDDAnswer from 2025 FDD Document
S AND SERVICES**
You must operate your Augusta Lawn Care Business according to our System and specifications. Except as described below, however, we do not require you to purchase or lease goods, services, supplies, fixtures, equipment, inventory, or real estate for your Augusta Lawn Care Business from us or any affiliate, or an Approved Supplier.
Approved Products and Services
You may only market, offer, sell, and provide the approved services, as well as any related merchandise and other products that we authorize for sale in conjunction with the Approved Products and Services. We will provide you with a list of our then-current Approved Products and Services, along with their standards and specifications, as part of the Manuals or otherwise in writing prior to the opening of your Franchised Business. We may update or modify this list in writing at any time.
If you wish to offer any product or service in your Franchised Business other than our Approved Products and Services, or use any item in connection with your Franchised Business that does not meet our System standards and specifications, then you must obtain our prior written approval as described more fully in this Item.
Approved Suppliers
While we do not currently do so, we have the right to require you to purchase any items or services necessary to operate your Franchised Business from a supplier that we approve or designate (each, an "Approved Supplier"), which may include us or our affiliate(s). If we choose to do so, we will provide you with a list of our Approved Suppliers in writing as part of the Manuals or otherwise in writing, and we may update or modify this list as we deem appropriate.
We may develop proprietary products for use in your Franchised Business, including private-label products that bear our Marks, and require you to purchase these items from us or our affiliate(s).
If you wish to purchase a product or service that we require you to purchase from an Approved Supplier from an alternate source, then you must obtain our prior written approval as outlined more fully in this Item. We may provide our standards and specifications for our Approved Products and Services directly to our Approved Suppliers, and may provide these standards and specifications to an alternative supplier you propose if: (i) we approve the supplier in writing as outlined more fully in this Item; and (ii) the alternative supplier agrees to sign our prescribed form of non-disclosure agreement with respect to any confidential information we disclose.
Except as provided above in this Item: (i) neither we nor any of our affiliates are an Approved Supplier for any items you are required to purchase in connection with your Franchised Business; and (ii) none of our officers own an interest in any of our Approved Suppliers other than us.
As of May 2023, we own and operate Copilot Software LLC, which is an approved (but not required) CRM provider to our franchisees. As of January 2025, we own and operate Mike Andes Media Group LLC, which is an approved (but not required) media provider to our franchisees. Other than this, neither we, nor people affiliated with us are Approved Suppliers. We reserve the right to designate us or any of our affiliates as an Approved Supplier with respect to any other item you must purchase in connection with your Franchised Business in the future.
Required Purchases and Right to Derive Revenue
There are no products or services we require you to purchase or lease from an Approved Supplier, or purchase or lease in accordance with our standards and specifications.
We and our affiliates reserve the right to derive revenue from any of the purchases (items or services) that our System franchisees are required to make in connection with the Franchised Business. This includes, but need not be limited to, our requirement that you use Copilot, our proprietary software. As of December 31, 2024, we received $_____ in revenue from all required purchases and leases of products and services by franchisees, including purchases of items to be resold in the Business, and rebates we receive from third-parties. This was _____ % of our total revenue of $_____, as reported in our most recent audited financial statements. Our affiliates did not receive any revenue from required purchases and leases of products and services by franchisees.
We and/or our affiliate(s) may receive payments or other compensation from Approved Suppliers or any other suppliers on account of these suppliers' dealings with us, you, or other Franchised Businesses in the System, such as rebates, commissions or other forms of compensation. We may use any amounts that we receive from suppliers for any purpose that we deem appropriate. We and/or our affiliates may negotiate supply contracts with our suppliers under which we are able to purchase products, equipment, supplies, services and other items at a price that will benefit us and our franchisees.
We estimate that your Required Purchases, purchases from Approved Suppliers and purchases that must meet our specifications in total will be about 15-25% of your total purchases to establish the Business and about 50-75% of your purchases to continue the operation of the Business.
Purchasing Cooperatives and Right to Receive Compensation
We may, when appropriate, negotiate purchase arrangements, including price terms, with designated and Approved Suppliers on behalf of the System. We may establish strategic alliances or preferred vendor programs with suppliers that are willing to supply some products, equipment, or services to some or all of the Businessesin our System. If we do establish those types of alliances or programs, we may: (i) limit the number of approved suppliers with whom you may deal; (ii) designate sources that you must use for some or all products, equipment and services; and (iii) refuse to approve proposals from franchisees to add new suppliers if we believe that approval would not be in the best interests of the System.
We reserve the right to create additional purchasing cooperatives in the future. We may negotiate volume purchase agreements with some vendors or Approved Suppliers for the purchase of goods and equipment needed to operate the Business.
Franchise Compliance
When determining whether to grant new or additional franchises, we consider many factors, including your compliance with the requirements described in this Item 8. You do not receive any further benefit as a result of your compliance with these requirements.
Insurance
You must obtain and maintain insurance, at your expense, as we require, in addition to any other insurance required by applicable law, your landlord, or otherwise.
What This Means (2025 FDD)
According to Augusta Lawn Care's 2025 Franchise Disclosure Document, franchisees must adhere to the Augusta Lawn Care system and specifications. While franchisees are generally not required to purchase goods or services from Augusta Lawn Care, its affiliates, or approved suppliers, there are exceptions. Franchisees are restricted to marketing, offering, selling, and providing only approved services and authorized related merchandise. To offer any non-approved products or services, franchisees must first obtain written approval from Augusta Lawn Care, ensuring that all items used meet system standards.
Augusta Lawn Care retains the right to mandate purchases from approved or designated suppliers, including themselves or their affiliates, and will provide a list of these suppliers in writing if they choose to exercise this right. They may also develop proprietary products, including private-label items bearing their marks, which franchisees would be required to purchase from them or their affiliates. Augusta Lawn Care may negotiate purchase arrangements with suppliers on behalf of the system and establish strategic alliances or preferred vendor programs, potentially limiting the number of approved suppliers or designating specific sources franchisees must use.
Compliance with these supplier restrictions is a factor Augusta Lawn Care considers when granting new or additional franchises. Augusta Lawn Care also has the right to limit the suppliers with whom franchisees may deal and may act as the sole approved supplier for certain products and services, charging a markup on these items. Franchisees are responsible for obtaining and maintaining insurance coverage as required by Augusta Lawn Care, and Augusta Lawn Care may receive compensation from approved suppliers based on franchisee purchases. Augusta Lawn Care can revoke approval of specific items, services, products, or suppliers at its discretion, and franchisees must cease using or purchasing from disapproved sources upon notice. The relationship between supplier restrictions outlined in Item 8 and franchisee obligations in Item 9 is not explicitly detailed in the provided excerpts.