Can Beard Papas withhold approval of a supplier requested by a Beard Papas franchisee?
Beard_Papas Franchise · 2025 FDDAnswer from 2025 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 supplier's 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 supplier's 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 26–29)
What This Means (2025 FDD)
According to Beard Papas's 2025 Franchise Disclosure Document, Beard Papas has the discretion to withhold approval of a supplier requested by a franchisee. If a franchisee wants to purchase or lease a source restricted item from a supplier not already approved by Beard Papas, the franchisee must submit a written request for approval along with any additional information, samples, and testing data that Beard Papas may request. Beard Papas may charge a fee to cover the costs of reviewing and evaluating the alternate supplier, product, or service. They may also inspect the supplier's facilities.
Beard Papas will then notify the franchisee of their approval or disapproval within 60 days of receiving the request and all required information. However, Beard Papas retains the sole discretion to withhold approval. The criteria Beard Papas uses to evaluate suppliers are not made available to franchisees, except that they consider the supplier's ability to meet Beard Papas's standards, specifications, and production requirements, the supplier's quality control, whether Beard Papas or its affiliates are the exclusive supplier of the item, and whether the supplier's approval will advance the overall interests of the Beard Papas system.
This policy means that a Beard Papas franchisee may not be able to choose their own suppliers, even if they find one that offers better pricing or terms. Beard Papas maintains control over the supply chain to ensure quality and consistency across all franchise locations, but this also limits the franchisee's autonomy and potentially increases their costs if they are required to purchase from Beard Papas's designated suppliers, including their affiliates. Franchisees should carefully consider these restrictions and their potential impact on their profitability before investing in a Beard Papas franchise.