For Azal Coffee franchises, what are the requirements for a supplier to be considered an 'Approved Supplier'?
Azal_Coffee Franchise · 2024 FDDAnswer from 2024 FDD Document
Approved Suppliers
Unless otherwise specified by us, all items used in the Franchise Business, other than Designated Products or Services, must be obtained in accordance with our specifications from a supplier that has been approved by us (an "Approved Supplier"). An Approved Supplier will be a supplier that: (a) meets our standards for quality and uniformity of goods and services and other relevant standards established by us; (b) we have designated in writing as an Approved Supplier; and (c) we have not later revoked the designation as an Approved Supplier.
Alternative Supplier Approval
You may request to have a supplier for items other than Designated Products or Services approved by submitting to us the information, samples or agreements necessary for our determination under the procedures specified by us. This request must be in writing and must include information about the product or supplier relating to our specifications, a sample of the product or service to be approved or a person at the manufacturer or supplier that we can contact
for information. We may submit the information to an independent laboratory or another independent expert to determine if the product or supplier meets our specifications. We require that you reimburse us for our actual costs incurred in making this determination. On your request, and only on a confidential basis, we will furnish you with any issued standards and specifications for items other than Designated Products or Services, as well as any issued criteria for supplier approval. We will notify you in writing of our approval or disapproval of a supplier within 30 days after receiving all information that we reasonably believe is necessary to make the determination.
Before we approve a supplier, the supplier may be required to enter into an agreement with us in a form reasonably acceptable to us providing that the supplier will: (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 us in confidence and have employees to which 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 our intellectual property. An 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.
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 22–25)
What This Means (2024 FDD)
According to Azal Coffee's 2024 Franchise Disclosure Document, an 'Approved Supplier' is a supplier that meets specific criteria set by Azal Coffee. To be considered an Approved Supplier, the supplier must meet Azal Coffee's standards for the quality and uniformity of goods and services, as well as any other relevant standards established by them. Azal Coffee must designate the supplier in writing as an Approved Supplier, and this designation must not have been revoked.
If a franchisee wants to propose a new supplier for items other than Designated Products or Services, they can submit a written request to Azal Coffee. This request must include all necessary information, samples, or agreements for Azal Coffee to evaluate the supplier. Azal Coffee may then submit this information to an independent expert to determine if the supplier meets their specifications. The franchisee is responsible for reimbursing Azal Coffee for any costs incurred during this evaluation process. Azal Coffee will provide any issued standards and specifications for items other than Designated Products or Services, as well as any issued criteria for supplier approval, on a confidential basis upon request. Azal Coffee will then notify the franchisee in writing of their decision within 30 days of receiving all necessary information.
Before a supplier is officially approved, Azal Coffee may require them to enter into an agreement. This agreement would ensure the supplier follows Azal Coffee's procedures, specifications, standards, formulas, patterns, and recipes. It also allows Azal Coffee to conduct periodic quality control inspections of the supplier's facilities and requires the supplier to provide samples for inspection without charge. The supplier must also agree to keep any trade secrets or confidential information private and ensure their employees sign agreements to prevent the use or disclosure of such information. Finally, the supplier may be required to pay a reasonable license fee for using Azal Coffee's intellectual property. It is important to note that approval is only for specific items sold by the supplier, not a blanket approval for all their products.