Under what conditions can an Auntie Annes franchisee purchase Goods from a source that is not an Approved Supplier?
Auntie_Annes Franchise · 2024 FDDAnswer from 2024 FDD Document
of your insurance, and otherwise within 10 days of our demand for proof. We reserve the right to obtain a master insurance policy on behalf of the System for certain types of coverage and require you to pay all or a portion of your proportionate share of coverage under the master policy to us or our Approved Supplier.
Currently, except as otherwise detailed above, you may purchase the remainder of the Goods that you use in your Shop from any source, as long as the Supplier and the Goods meet our minimum Standards. We may designate any Supplier as ineligible to supply Goods to you in our sole discretion. Further, we may designate one or more Approved Suppliers for any Goods upon written notice to you.
We or Our Affiliates as Approved Suppliers. Except as set forth in this paragraph, neither we nor our affiliates are currently Approved Suppliers for any Goods that you are required to purchase or lease. If you qualify to operate an SRU, you will be required to lease or purchase the cart or kiosk from us or a third party to participate in the SRU Program. Additionally, GoTo Supply provides supply chain, quality assurance, distribution, and logistics services to franchisees, and GoTo Rewards administers our gift card program, although neither are Approved Suppliers for any Goods. We and our affiliates reserve the right to become an Approved Supplier or the only Approved Supplier for any Goods in the future.
Interest in Approved Suppliers. Except through an interest in us or our affiliates, none of our officers owns any interest in any Suppliers with whom you must or are recommended to do business.
Approval Process. If you would like to offer products or use any Goods that we have not approved or to purchase or lease from a Supplier that we have not approved, you must submit a written request for approval and provide us with any information that we request. We have the right to inspect the proposed Supplier's facilities and test samples of the proposed Goods.
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 54–59)
What This Means (2024 FDD)
According to Auntie Annes's 2024 Franchise Disclosure Document, a franchisee can purchase Goods from a source that is not an Approved Supplier if the Supplier and the Goods meet Auntie Annes's minimum Standards. However, Auntie Annes retains the right to designate any Supplier as ineligible at their discretion and can designate Approved Suppliers for any Goods with written notice to the franchisee.
To use a non-approved Supplier, an Auntie Annes franchisee must submit a written request for approval, providing any information Auntie Annes requests. Auntie Annes has the right to inspect the Supplier's facilities and test samples of the Goods. The franchisee is responsible for covering the costs of inspection and testing, regardless of whether the Supplier or Goods are ultimately approved. Auntie Annes has the sole discretion to grant, deny, or revoke approval.
If a franchisee does not receive approval within 90 days after submitting all required information, the request is considered disapproved. It's important to note that the products and services approved for one Shop may differ from those permitted or required in other Auntie Annes locations. Auntie Annes estimates that purchases from Approved Suppliers will constitute approximately 90% of the total purchases and leases needed to establish a Shop and about 95% of the total purchases and leases needed to operate a Shop.