Does Belocal have a Supplier Approval Procedure?
Belocal Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee must receive prior, written approval from Franchisor before purchasing any products, supplies, or services from any supplier not already approved by Franchisor.
If Franchisee desires to purchase, lease, or use any products, services, or other items from an unapproved supplier, Franchisee must submit to Franchisor a written request for such approval, or must request the supplier itself to make such request.
When reviewing an item or supplier, Franchisor may consider various factors, including, but not limited to, pricing, quality, consistency, efficiency, effectiveness, control of and protection of proprietary information, ability to service the entire franchise system, data security, credit worthiness, and solvency.
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.
Franchisor reserves the right, at its option, to re-inspect from time to time the business premises and products of any approved supplier.
Franchisor has the right to revoke, in its sole discretion, the approval of any item or supplier that fails to meet Franchisor's standards.
Nothing in the foregoing shall be construed to require Franchisor to approve any particular item or supplier (even if it satisfies Franchisor's criteria), nor is Franchisor required to issue any item or supplier approval standards and specifications to Franchisees.
Franchisor shall give Franchisee 60 days' prior written notice of its revocation of any previously approved supplier.
Franchisee's failure to comply with the provisions of this Section 5.C. shall be deemed a material breach under this Agreement.
Source: Item 22 — CONTRACTS (FDD page 71)
What This Means (2025 FDD)
According to Belocal's 2025 Franchise Disclosure Document, Belocal franchisees must get prior written approval from Belocal before purchasing from any supplier not already approved. If a franchisee wants to use an unapproved supplier, they must submit a written request to Belocal, or the supplier must make the request. Belocal may consider factors like pricing, quality, data security, and solvency when reviewing a supplier. The franchisee may have to reimburse Belocal for reasonable expenses incurred during the approval process, regardless of whether the supplier is approved. Belocal can also inspect the supplier's premises and require samples for testing, with the franchisee or supplier covering the costs. Belocal can re-inspect approved suppliers and revoke approval if they don't meet Belocal's standards. Belocal is not required to approve any particular supplier, even if they meet the criteria, and isn't required to issue any item or supplier approval standards and specifications to franchisees. Belocal will give the franchisee 60 days' prior written notice if it revokes a previously approved supplier. Failure to comply with these supplier rules is a material breach of the agreement.
This means that as a Belocal franchisee, you will likely need to purchase many products, supplies, and services from Belocal-approved suppliers. If you want to use a different supplier, you'll need to go through an approval process, which could cost you money and may not be successful. Belocal also has the right to change the list of approved suppliers at any time and can designate itself or an affiliate as the exclusive source for certain items or services.
This system allows Belocal to maintain quality control and uniformity across its franchise system. It also allows Belocal to potentially profit from supplier relationships, as they may receive payments or discounts from suppliers based on the dealings with franchisees. While this arrangement benefits Belocal, it may limit a franchisee's options and potentially increase their costs if they are required to use more expensive approved suppliers. Franchisees should carefully consider these factors and discuss them with Belocal before investing in a franchise.