Does Bang Cookies have the right to approve suppliers other than themselves?
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' 2024 Franchise Disclosure Document, franchisees may only sell "Approved Services and Products" as specified in the manuals or otherwise approved in writing by Bang Cookies. Bang Cookies retains the right to modify the required products and services, potentially including mandatory participation in fundraising events.
Bang Cookies also reserves the right to designate themselves as an approved supplier, from which they may receive revenue. Furthermore, if a franchisee purchases a Bakery Location, Bang Cookies can require that franchisee to act as a designated supplier for Satellite Locations within their territory. These arrangements, including pricing, would be subject to the standards and specifications outlined in the manuals.
This means that while franchisees must adhere to Bang Cookies' approved products and services, Bang Cookies maintains control over the supply chain, potentially benefiting financially from it. Franchisees may be obligated to source products from Bang Cookies or act as a supplier for other locations, impacting their operational flexibility and potentially their profit margins. Prospective franchisees should carefully review the manuals and understand the implications of these supplier arrangements.