Is Bang Cookies or its affiliates permitted to be designated as the exclusive supplier for the system?
Bang_Cookies Franchise · 2024 FDDAnswer from 2024 FDD Document
tricted Purchases and Leases – Generally**
We require that you purchase or lease certain source restricted goods and services for the development and operation of your Shop. Source restricted goods and services are goods and services that must meet our specifications and/or that must be purchased from an approved or designated supplier that may include us or our affiliates. We may designate a supplier, including ourselves or our affiliates, as the exclusive supplier for the System. Our specifications and list of approved and designated suppliers is contained in our Manuals. We will notify you of any changes to our specifications or list of approved or designated suppliers. We may notify you of these changes in various ways, including written or electronic correspondence, amendments and updates to our Manuals, and other forms of communication. We formulate and modify our standards and specifications for products and services based on our industry experience and our management decisions as to the overall operation and expansion of the System.
Suppliers and Supplier Criteria
We may designate ourselves and our affiliates as exclusive suppliers of source restricted goods and services. We may designate ourselves or a third party as the sole and exclusive supplier irrespective of the existence of competing suppliers. If, in the Manuals, we do not designate a supplier for a particular item, you will purchase all such products, supplies and services from suppliers who meet our specifications and standards. Currently, we are not and our affiliates are not approved suppliers of the source restricted goods and services identified below. Currently no officer of ours owns an interest in any of our designated suppliers.
If you want to purchase or lease a source restricted item from a supplier that has not been previously approved or designated by us in writing, you must send us a written request for approval and submit additional information, samples, and testing data that we may request.
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 24–28)
What This Means (2024 FDD)
According to Bang Cookies's 2024 Franchise Disclosure Document, Bang Cookies has the right to designate itself or its affiliates as exclusive suppliers for the system. The FDD states, "We may designate a supplier, including ourselves or our affiliates, as the exclusive supplier for the System." This means that Bang Cookies franchisees may be required to purchase certain goods and services only from Bang Cookies or its affiliated companies.
This ability to designate exclusive suppliers allows Bang Cookies to maintain quality control and standardization across all franchise locations. Bang Cookies formulates and modifies its standards and specifications for products and services based on its industry experience and management decisions. This ensures that all franchisees operate under the same standards of quality and service.
For a prospective franchisee, this means that a significant portion of their purchases and leases, estimated at approximately 80% for establishing the franchised business and 60% of ongoing operating expenses, will be from suppliers approved or designated by Bang Cookies. While this may limit a franchisee's choice of suppliers, it also ensures that they are receiving products and services that meet Bang Cookies's standards.
Currently, Bang Cookies and its affiliates are not approved suppliers of source restricted goods and services. However, Bang Cookies reserves the right to require franchisees to purchase or lease certain items from them or their affiliates, and they may include a reasonable markup in the price of these products and services. Franchisees are also obligated to use Bang Cookies's designated suppliers for items such as system supplies, branded furniture and fixtures, signage, point of sale systems, credit card processing, online ordering systems, and branded marketing materials.