Under what circumstances can Bombs Away Franchising require a franchisee to purchase or lease Inputs from specific sources?
Bombs_Away Franchise · 2024 FDDAnswer from 2024 FDD Document
comply with any code of ethics or statement of values from Bombs Away Franchising. Franchisee shall not take any action which may injure the goodwill associated with the Marks.
ARTICLE 8. SUPPLIERS AND VENDORS
- 8.1 Generally. Franchisee shall acquire all Inputs required by Bombs Away Franchising from time to time in accordance with System Standards. Bombs Away Franchising may require Franchisee to purchase or lease any Inputs from Bombs Away Franchising, Bombs Away Franchising's designee, Required Vendors, Approved Vendors, and/or under Bombs Away Franchising's specifications. Bombs Away Franchising may change any such requirement or change the status of any vendor. To make such requirement or change effective, Bombs Away Franchising shall issue the appropriate System Standards.
- 8.2 Alternate Vendor Approval. If Bombs Away Franchising requires Franchisee to purchase a particular Input only from an Approved Vendor or Required Vendor, and Franchisee desires to purchase the Input from another vendor, then Franchisee must submit a written request for approval and any information, specifications and/or samples requested by Bombs Away Franchising. Bombs Away Franchising may condition its approval on such criteria as Bombs Away Franchising deems appropriate, which may include evaluations of the vendor's capacity, quality, financial stability, reputation, and reliability; inspections; product testing, and performance reviews. Bombs Away Franchising will provide Franchisee with written notification of the approval or disapproval of any proposed new vendor within 30 days after receipt of Franchisee's request.
- 8.3 Alternate Input Approval. If Bombs Away Franchising requires Franchisee to purchase a particular Input, and Franchisee desires to purchase an alternate to the Input, then Franchisee must submit a written request for approval and any information, specifications and/or samples requested by Bombs Away Franchising. Bombs Away Franchising will provide Franchisee with written notification of the approval or disapproval of any proposed alternate Input within 30 days after receipt of Franchisee's request.
- 8.4 Purchasing. Bombs Away Franchising may negotiate prices and terms with vendors on behalf of the System. Bombs Away Franchising may receive rebates, payments, or other consideration from vendors in connection with purchases by franchisees. Bombs Away Franchising has the right (but not the obligation) to collect payments from Franchisee on behalf of a vendor and remit the payments to the vendor, and to impose a reasonable markup or charge for administering the payment program. Bombs Away Franchising may implement a centralized purchasing system. Bombs Away Franchising may establish a purchasing cooperative and require Franchisee to join and participate in the purchasing cooperative on such terms and conditions as Bombs Away Franchising may determine.
- 8.5 No Liability of Franchisor. Bombs Away Franchising shall not have any liability to Franchisee for any claim or loss related to any product provided or service performed by any Approved Vendor or Required Vendor, including without limitation defects, delays, or unavailability of products or services.
Source: Item 22 — CONTRACTS (FDD pages 35–36)
What This Means (2024 FDD)
According to Bombs Away's 2024 Franchise Disclosure Document, Bombs Away Franchising retains significant control over the sources from which franchisees can obtain necessary goods and services. Bombs Away may require franchisees to purchase or lease any Inputs from Bombs Away Franchising itself, Bombs Away Franchising's designee, Required Vendors, Approved Vendors, and/or under Bombs Away Franchising's specifications. The term "Input" is broadly defined as any goods, services, supplies, fixtures, equipment, inventory, computer hardware and software, real estate, or comparable items related to establishing or operating the Business. These requirements are implemented through System Standards, which Bombs Away Franchising can modify at any time.
If Bombs Away Franchising mandates purchasing a particular Input from only an Approved Vendor or Required Vendor, a franchisee can request approval to purchase the Input from an alternate vendor. The franchisee must submit a written request with any information, specifications, and/or samples requested by Bombs Away Franchising. Bombs Away Franchising's approval may depend on criteria such as evaluations of the vendor's capacity, quality, financial stability, reputation, and reliability; inspections; product testing; and performance reviews. Bombs Away Franchising will provide written notification of the approval or disapproval of any proposed new vendor within 30 days after receipt of the franchisee's request.
Similarly, if a franchisee wants to purchase an alternate Input to one Bombs Away Franchising requires, they must submit a written request for approval with any information, specifications, and/or samples requested by Bombs Away Franchising. Bombs Away Franchising will provide written notification of the approval or disapproval of any proposed alternate Input within 30 days after receipt of the franchisee's request. Bombs Away Franchising may also negotiate prices and terms with vendors on behalf of the System and may receive rebates, payments, or other consideration from vendors in connection with franchisee purchases. Bombs Away Franchising has the right to collect payments from the franchisee on behalf of a vendor, remit the payments to the vendor, and impose a reasonable markup or charge for administering the payment program and may implement a centralized purchasing system or establish a purchasing cooperative that franchisees are required to join.