Does C3 Wellness Spa or its affiliates have the potential to be designated as the exclusive supplier for the System Supplies?
C3_Wellness_Spa Franchise · 2024 FDDAnswer from 2024 FDD Document
IONS ON SOURCES OF PRODUCTS AND SERVICES**
You may only offer and sell services and products that we designate (the "Approved Spa Products and Services"). You may only use, lease, and/or install those products, services, furniture, fixtures, equipment, and other materials and supplies that we authorize and designate in writing that are now a part of our System or that we may designate as a part of our System in the future (the "System Supplies"). You must operate and/or manage the Spa Location Franchise in strict conformity with the Franchise Agreement and the methods, standards, specifications and sources of supply that we designate and prescribe in the Manuals.
Source Restricted Purchases and Leases - Generally
We require that you purchase or lease certain source restricted goods and services for the development and operation of your Spa Location Franchise. Source restricted goods and services are goods and services that must meet our specifications and/or must be purchased from an approved or designated supplier. We may designate a supplier, that may include us or our affiliates, as the exclusive supplier for the System. Our specifications and list of approved and designated suppliers is contained in our Manuals. We will notify you of any changes to our specifications or list of approved or designated suppliers. We may notify you of these changes in various ways, including written or electronic correspondence, amendments and updates to our Manuals, verbal and other forms of communication. We formulate and modify our standards and specifications for products and services based on our industry experience and our management decisions as to the overall operation and expansion of the System.
Suppliers and Supplier Criteria
We may designate ourselves and our affiliates as exclusive suppliers of source restricted goods and services. We may designate ourselves or a third party as the sole and exclusive supplier irrespective of the existence of competing suppliers. If there is no designated supplier for a particular item, you will purchase all products, supplies and services from suppliers who meet our specifications and standards. During the year ending December 31, 2023, we did not receive any revenue from approved suppliers based on our franchisees' purchases.
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 25–29)
What This Means (2024 FDD)
According to C3 Wellness Spa's 2024 Franchise Disclosure Document, C3 Wellness Spa or its affiliates can be designated as the exclusive supplier for System Supplies. System Supplies are the products, services, furniture, fixtures, equipment, and other materials and supplies that C3 Wellness Spa authorizes and designates in writing as part of their system.
The FDD specifies that C3 Wellness Spa may designate themselves or their affiliates as exclusive suppliers of source-restricted goods and services, irrespective of other competing suppliers. If there isn't a designated supplier for a particular item, franchisees must purchase those items from suppliers who meet C3 Wellness Spa's standards and specifications.
For a C3 Wellness Spa franchisee, this means that you may be required to purchase a significant portion of your supplies from C3 Wellness Spa or its affiliates. While this ensures brand consistency and adherence to standards, it may also limit your ability to shop for the best prices or preferred vendors. It is important to note that during the year ending December 31, 2023, C3 Wellness Spa did not receive any revenue from approved suppliers based on franchisees' purchases.