For Better Blend franchises in Indiana, what happens if a provision of the Multi-Unit Development agreement requires exclusive purchasing from the franchisor?
Better_Blend Franchise · 2024 FDDAnswer from 2024 FDD Document
- **2.
Certain Provisions Modified.** Any provision of the Agreement which would have any of the following effects is hereby modified to the extent required for the Agreement to be in compliance with the Indiana Acts:
- (1) Requiring goods, supplies, inventories, or services to be purchased exclusively from the franchisor or sources designated by the franchisor where such goods, supplies, inventories, or services of comparable quality are available from sources other than those designated by the franchisor.
However, the publication by the franchisor of a list of approved suppliers of goods, supplies, inventories, or services or the requirement that such goods, supplies, inventories, or services comply with specifications and standards prescribed by the franchisor does not constitute designation of a source nor does a reasonable right of the franchisor to disapprove a supplier constitute a designation.
This subdivision does not apply to the principal goods, supplies, inventories, or services manufactured or trademarked by the franchisor.
Source: Item 22 — CONTRACTS (FDD page 43)
What This Means (2024 FDD)
According to Better Blend's 2024 Franchise Disclosure Document, the Indiana Rider to the Franchise Agreement modifies any provision that requires franchisees to purchase goods, supplies, inventories, or services exclusively from Better Blend or its designated sources. This modification applies if comparable quality goods, supplies, inventories, or services are available from other sources.
However, Better Blend's publication of a list of approved suppliers or the requirement that goods, supplies, inventories, or services comply with Better Blend's specifications and standards does not constitute a designation of a source. Additionally, Better Blend's reasonable right to disapprove a supplier does not constitute a designation.
This modification does not apply to the principal goods, supplies, inventories, or services manufactured or trademarked by Better Blend. This means that if Better Blend manufactures or trademarks certain products, franchisees may still be required to purchase those items exclusively from Better Blend, even if comparable products are available elsewhere.