Under what conditions can Auntie Annes revoke approval of a previously approved supplier?
Auntie_Annes Franchise · 2024 FDDAnswer from 2024 FDD Document
supply the item to you in accordance with our Standards, including our standards as to the artwork and text on the items; (ii) if the Supplier is to receive access to any of our Confidential Information (defined below), Trade Secrets (defined below), or logos, the Supplier must sign a confidentiality agreement and/or our standard form license agreement we prepare; (iii) the Supplier must demonstrate that it is in good standing in the business community with respect to its financial soundness and the reliability of its products or services; and (iv) the Supplier must sign all agreements we require our suppliers to sign at that time.
- 7.4 Revocation of Approval. We reserve the right to reinspect the facilities and Goods of any Approved Supplier and to revoke approval of the Goods or Supplier if any fail to meet any of our
then-current criteria. If you receive a notice of revocation of approval, you agree to cease purchasing or leasing the formerly-approved Goods or any Goods from the formerly-approved Supplier and you must dispose of your remaining inventory of the formerly-approved Goods as we direct.
Source: Item 22 — CONTRACTS (FDD page 106)
What This Means (2024 FDD)
According to Auntie Annes's 2024 Franchise Disclosure Document, Auntie Annes retains the right to reinspect the facilities and goods of any approved supplier. If the supplier or their goods fail to meet Auntie Annes's current criteria, Auntie Annes can revoke its approval.
If Auntie Annes revokes approval, franchisees must stop purchasing or leasing the formerly-approved goods from the formerly-approved supplier. Franchisees are also required to dispose of any remaining inventory of the formerly-approved goods as directed by Auntie Annes.
If the revoked product or service was being sold to customers, franchisees must immediately stop offering the service. They can continue selling the product from their existing inventory for up to 30 days following the disapproval, but Auntie Annes has the right to shorten this period if they believe the continued sale would harm their reputation. After the designated period, franchisees must dispose of any remaining inventory as directed by Auntie Annes.