Who pays for the inspection and testing of a proposed Belocal supplier, and what is the limit on the charge?
Belocal Franchise · 2025 FDDAnswer from 2025 FDD Document
At Franchisor's request, Franchisee must pay or reimburse Franchisor for Franchisor's reasonable expenses incurred in the supplier/item approval process (whether or not approval of the supplier is granted).
Franchisor has the right to require that its representatives be permitted to inspect the proposed supplier's business premises, software, security systems, or procedures, and require that samples from the proposed supplier be delivered, if applicable, either to Franchisor or to an independent laboratory designated by Franchisor, for testing.
A charge, not to exceed the cost of the inspection and of the test (including Franchisor's administrative costs attributable to both), must be paid by Franchisee or the supplier.
Source: Item 22 — CONTRACTS (FDD page 71)
What This Means (2025 FDD)
According to Belocal's 2025 Franchise Disclosure Document, if a franchisee wants to use a supplier not already approved by Belocal, they must seek approval from Belocal. As part of this process, Belocal may request an inspection of the proposed supplier's business.
The cost of this inspection and any required testing can be charged to either the Belocal franchisee or the supplier being evaluated. The charge is limited to the cost of the inspection and testing, including Belocal's administrative costs related to both.
This means that a Belocal franchisee could incur expenses when seeking approval for a new supplier. It is important to note that Belocal retains the right to re-inspect approved suppliers and can revoke approval if a supplier fails to meet their standards. Therefore, franchisees should carefully consider the potential costs and benefits before requesting approval for a new supplier.