Can Bang Cookies withhold approval of a supplier in their sole discretion?
Bang_Cookies Franchise · 2024 FDDAnswer from 2024 FDD Document
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. We may charge you a fee equal to the costs and expenses that we incur in reviewing and evaluating an alternate supplier, product, and/or service requested by you. We may request that you send us samples from the supplier for testing and documentation from the supplier for evaluation. We may also require, subject to our discretion, that we be allowed to inspect the supplier's facilities. We will notify you of our approval or disapproval within a reasonable time not exceeding 60 days after we receive your written request and all additional information and samples that we request. We may, in our sole discretion, withhold our approval. We do not make our procedures or criteria for approving suppliers available to our System franchisees, except that when evaluating the approval of a particular supplier, among other things, we consider: whether the supplier can demonstrate to our reasonable satisfaction the ability to meet our standards, specifications and production requirements, the suppliers quality control, whether or not we are the exclusive supplier of the particular item, whether or not our affiliate or affiliates are the exclusive supplier of the particular item, and whether or not the suppliers approval, in our sole determination, will allow us to advance the overall interests of the System and our company.
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 retains the right to withhold approval of a supplier at its sole discretion. If a franchisee wishes to use a supplier not already approved, they must submit a written request along with any information, samples, and testing data that Bang Cookies requests. Bang Cookies may charge a fee to cover the costs of reviewing and evaluating the proposed alternate supplier, product, or service. Bang Cookies may also inspect the supplier's facilities.
Bang Cookies will then notify the franchisee of their decision within 60 days of receiving the request and all required information. The FDD states that Bang Cookies does not disclose the specific procedures or criteria used for approving suppliers to its franchisees. However, when evaluating a supplier, Bang Cookies considers factors such as the supplier's ability to meet Bang Cookies's standards, specifications, and production requirements, the supplier's quality control measures, whether Bang Cookies or its affiliates are the exclusive supplier of the item, and whether approving the supplier will advance the overall interests of the Bang Cookies system.
This policy gives Bang Cookies significant control over the supply chain, which is common in franchising to maintain quality and consistency. However, it also means that franchisees have limited flexibility in sourcing products and services, and Bang Cookies's decision is final. Franchisees should be aware of this restriction and factor it into their business planning, as it could impact costs and availability of certain items. Franchisees should also inquire about the typical costs associated with requesting approval for a new supplier and the likelihood of approval.