Does Bang Cookies reserve the right to be designated as an approved supplier?
Bang_Cookies Franchise · 2024 FDDAnswer from 2024 FDD Document
You may only sell the Approved Services and Products as specified in the Manuals or otherwise approved by us in writing and may only sell the products and services required by us. We can change the products and services that you must offer, which may include a requirement to participate in fundraising or nonprofit events and programs ("Fundraisers"). If required, Fundraisers may be subject to our standards and specifications or program parameters, such as pricing, as specified in the Manuals from time to time. We reserve the right to designate ourselves as an approved supplier in which we may receive revenue. If you purchase a Bakery Location, we reserve the right to require you to act as a designated supplier for Satellite Locations in your Territory, which may be subject to our standards and specifications or program parameters, such as pricing, as specified in the Manuals from time to time. There is no limitation on our right to change the products and services offered sold by Bang Cookies Shops. You are not limited to whom you may sell products and services of your Bang Cookies Shop, provided you do so exclusively from your Shop Location and as otherwise required by and in compliance with the standards we determine for the System.
Source: Item 16 — RESTRICTIONS ON PRODUCTS AND SERVICES SOLD (FDD pages 40–42)
What This Means (2024 FDD)
According to Bang Cookies's 2024 Franchise Disclosure Document, Bang Cookies retains the right to designate itself as an approved supplier. This means that Bang Cookies can require franchisees to purchase certain products or services directly from them, and Bang Cookies may receive revenue from these purchases.
For a prospective franchisee, this could mean that they are obligated to source supplies from Bang Cookies, even if they could find cheaper alternatives elsewhere. While this ensures consistency and quality control across the Bang Cookies system, it could also impact the franchisee's profit margins if Bang Cookies's prices are higher than other suppliers.
Furthermore, if a franchisee purchases a Bakery Location, Bang Cookies reserves the right to require that franchisee to act as a designated supplier for Satellite Locations within their territory. This would be subject to Bang Cookies's standards, specifications, and program parameters, such as pricing, as specified in the manuals. This could create an additional revenue stream for the franchisee, but also additional responsibilities in supplying other locations.