Does Azal Coffee have to approve a supplier if they meet all the requirements?
Azal_Coffee Franchise · 2024 FDDAnswer from 2024 FDD Document
Before we approve a supplier, we may require the supplier to enter into an agreement with us in a form reasonably acceptable to us that requires the supplier to: (a) follow our procedures, specifications and standards, formulas, patterns, and recipes; (b) allow periodic quality control inspections of the supplier's premises and production facilities; (c) provide a reasonable number of samples, without charge, for inspection; (d) keep any trade secrets or other confidential information disclosed to it by you or us in confidence and have employees to whom disclosure is made sign agreements that they will not use or disclose confidential information; and (e) pay a reasonable license fee for a limited license for the production and sale of items using the Intellectual Property (defined in Section 11.1). Our approval of a supplier is not a blanket approval of the items the supplier may sell but only for specific items sold by that supplier as approved by us.
In order to take advantage of group purchasing power and to ensure uniformity and quality, we reserve the right to limit the total number of Approved Suppliers for any items. We may add or delete Designated or Approved Suppliers and you must comply with those changes immediately on
Source: Item 22 — CONTRACTS (FDD page 51)
What This Means (2024 FDD)
According to Azal Coffee's 2024 Franchise Disclosure Document, Azal Coffee does not provide explicit details on whether they must approve a supplier if the supplier meets all requirements. However, the FDD does state that Azal Coffee has specific requirements that a supplier must meet before being approved.
These requirements include the supplier agreeing to follow Azal Coffee's procedures, specifications, standards, formulas, patterns, and recipes. The supplier must also allow periodic quality control inspections of their premises and production facilities and provide a reasonable number of samples for inspection without charge. Additionally, the supplier must keep any trade secrets or confidential information secure and ensure their employees sign agreements to protect this information. Finally, the supplier may need to pay a reasonable license fee for using Azal Coffee's intellectual property.
Even if a supplier meets these requirements, Azal Coffee maintains the right to limit the total number of approved suppliers to ensure uniformity and quality within the franchise system. Azal Coffee also reserves the right to add or delete approved suppliers, and franchisees must comply with these changes immediately upon written notice. This suggests that meeting the minimum requirements does not guarantee approval, as Azal Coffee has broader strategic considerations for supplier selection.