Must a Buns On Fire franchisee purchase or lease certain items from suppliers approved by Buns On Fire?
Buns_On_Fire Franchise · 2025 FDDAnswer from 2025 FDD Document
the standards and specifications established by us.
You must purchase or lease certain foods, beverages, equipment, supplies and products required for Buns on Fire Restaurant franchise from suppliers approved by us. We will provide a written list of approved suppliers and the foods, beverages and products subject to approved supplier requirements and will notify you of any additions or deletions from this list. We reserve the absolute right to update or otherwise modify this list from time to time, in our sole discretion, upon written notice to you. If you want to purchase products subject to our approved supplier requirements from a supplier who has not been previously approved by us, then you must, at your expense, send to us representative samples or specifications of that supplier's products or services, and certain other information about the supplier's products and business that we may request. We will also have the right to inspect the supplier's facilities and otherwise evaluate the proposed supplier and its products or services, and you must reimburse us for the expenses we incur to inspect and evaluate the supplier. Within thirty (30) days after receiving the necessary samples and information, we will notify you in writing as to whether the supplier's products or services comply with the uniformity requirements, quality standards and specifications established by us, and whether the supplier's business reputation, delivery performance, credit rating and other relevant information are satisfactory. If we do not respond in this time period, the supplier shall be deemed disapproved. The criteria for supplier approval are available to franchisees upon request. We reserve the right to approve or disapprove any requested supplier for any reason or no reason in our sole discretion.
In the future, you may be required to purchase other food, ingredients, supplies, merchandise, carpet, leasehold improvements, and/or decorations from us or our affiliates.
We estimate that purchases of food, beverages and products that meet our standards and specifications and purchases from designated or approved suppliers will constitute up to 80% of your initial expenditures to open your Buns on Fire Restaurant franchise, and approximately 60% of the annual ongoing expenditures to operate your Franchise Business.
Obligation to Sign Personal Guaranty with Us
As a Franchisee, you will be required to sign personal guarantees relating to the payment of fees payable to us (the "Personal Guaranty"). The Personal Guaranty is attached to the Franchise Agreement (which is attached to this Franchise Disclosure Document as Exhibit D).
Revenue from Franchisee Purchases
During the 2023 fiscal year, we received no revenue or other material consideration from required purchases or leases by Buns on Fire franchisees. No affiliates received revenue or other material consideration from required purchases or leases by Buns on Fire franchisees.
We do not negotiate purchase arrangements, including price terms, with any of your direct suppliers for your benefit, however, we do intend to negotiate purchase arrangements with our Product suppliers, which may benefit you indirectly. We reserve the right to negotiate rebates and other forms of compensation from suppliers. If we do, we may use any amounts that we receive from suppliers for any purpose we deem appropriate.
We do not provide material benefits to you (for example, renewal or granting additional franchises) for purchasing particular products or services or using particular suppliers.
We do not have any purchasing or distribution cooperatives at this time. We do not, and do not have plans to, negotiate purchase agreements with suppliers.
Insurance
You must obtain and maintain at your own expense the insurance coverage that we and your landlord (if applicable) periodically require, and you must meet the other insurance-related obligations in the Franchise Agreement. Currently, we require you to maintain the following coverages:
- ( 1 ) comprehensive general liability insurance for bodily injury, death and property damage caused by your operation of the Franchise Business, including employment practices liability coverage and contractual liability coverage, (not less than $1,000,000 each occurrence for bodily injury, death or property damage; not less than $1,000,000 each occurrence for personal and advertising injury; and $2,000,000 general aggregate);
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 19–22)
What This Means (2025 FDD)
According to the 2025 Buns On Fire Franchise Disclosure Document, franchisees are required to purchase or lease specific foods, beverages, equipment, supplies, and products from suppliers that Buns On Fire has approved. Buns On Fire will provide a written list of these approved suppliers, including the items that must be purchased from them, and will notify franchisees of any changes to this list.
If a franchisee wishes to use a supplier not already on the approved list, they must submit samples and specifications of the supplier's products or services to Buns On Fire for evaluation, at the franchisee's expense. Buns On Fire has the right to inspect the supplier's facilities and evaluate their products or services, with the franchisee responsible for reimbursing Buns On Fire for any expenses incurred during this process. Buns On Fire will then notify the franchisee in writing within thirty days whether the supplier meets their standards. Failure to respond within this period means the supplier is disapproved. Buns On Fire retains the right to approve or disapprove any requested supplier at its discretion.
The FDD also states that, with the exception of produce which is to be sourced locally, franchisees must purchase all food products from suppliers identified by Buns On Fire, including from its affiliates. Certain items selected by Buns On Fire for consistency in quality, such as specific brand name products, must be purchased from manufacturers or producers approved by Buns On Fire. These items can be purchased from any approved distributor that can supply them. Franchisees must also purchase certain foods, beverages, and products that meet the written standards and specifications established by Buns On Fire to ensure uniformity and quality across all Buns On Fire Restaurant franchises.
The FDD estimates that purchases of food, beverages, and products that meet Buns On Fire's standards and specifications, and purchases from designated or approved suppliers, will constitute up to 80% of the initial expenditures to open a Buns on Fire Restaurant franchise, and approximately 60% of the annual ongoing expenditures to operate the Franchise Business. During the 2023 fiscal year, Buns On Fire received no revenue or other material consideration from required purchases or leases by Buns on Fire franchisees. No affiliates received revenue or other material consideration from required purchases or leases by Buns on Fire franchisees.