From whom must a C3 Wellness Spa franchisee exclusively purchase system supplies?
C3_Wellness_Spa Franchise · 2024 FDDAnswer from 2024 FDD Document
- (3) The Franchised Business will exclusively: (a) offer and provide the Approved Spa Products and Services or, as applicable the Spa Facility and Management Services; (b) offer and provide from the Spa Location the Approved Spa Products and Services in accordance with the System's standards and specifications; (c) exclusively purchase and use System Supplies purchased from Franchisor or Franchisor's designated suppliers; (d) exclusively purchase and utilize equipment, supplies, promotional materials, point of sale systems and Business Management System(s)
designated by Franchisor and subject to Franchisor's specifications; (e) purchase interior displays, point of sale displays, uniforms, supplies, marketing materials and promotional materials including, but not limited to, System Supplies, as designated by Franchisor and only from Franchisor or Franchisor's approved supplier(s); and (f) purchase from distributors and other suppliers approved by Franchisor all other materials, goods, and supplies (including but not limited to System Supplies) used in preparing, offering, selling, promoting, and serving the Approved Spa Products and Services.
(4) Franchisor has and will periodically approve suppliers and distributors of the equipment, materials, supplies and products including, but not limited to, System Supplies, that meet Franchisor's standards, specifications, and requirements including, without limitation, standards, specifications, and requirements relating to the equipment and supplies to be utilized by the Franchised Business.
(5) Franchisor, in Franchisor's Reasonable Business Judgment, may, from time to time, modify the list of approved brands, suppliers and distributors of System Supplies and approved equipment, supplies and services to be utilized by the Franchised Business and Franchisee shall, after receipt in writing of such modification, not reorder any brand and/or purchase from any supplier or distributor that is no longer designated or approved by Franchisor.
(6) Franchisor reserves the right to designate, from time to time, a single supplier and/or distributor for any services, products, equipment, supplies, or materials including, but not limited to, the System Supplies and to require Franchisee to use such a designated supplier exclusively, which exclusive designated supplier and/or distributor may be Franchisor and/or Franchisor's affiliates.
Franchisor and its affiliates may receive payments from suppliers and/or distributors on account of such supplier's or distributor's dealings with Franchisee and other franchisees and may use all amounts so received without restriction and for any purpose Franchisor and its affiliates deem appropriate.
Source: Item 23 — RECEIPTS (FDD pages 59–293)
What This Means (2024 FDD)
According to C3 Wellness Spa's 2024 Franchise Disclosure Document, franchisees must exclusively purchase System Supplies from C3 Wellness Spa or its designated suppliers. This requirement is part of maintaining the System's standards and specifications.
This means a C3 Wellness Spa franchisee cannot source these supplies from any other vendor, even if they offer similar products at a lower cost. The franchisor has the right to modify the list of approved brands, suppliers, and distributors of System Supplies. If a supplier is no longer approved, the franchisee must cease purchasing from them after receiving written notice.
C3 Wellness Spa also reserves the right to designate a single exclusive supplier or distributor for any services, products, equipment, supplies, or materials, including System Supplies, which may be C3 Wellness Spa itself or one of its affiliates. The franchisor and its affiliates may receive payments from suppliers based on the franchisee's purchases, and they can use these amounts without restriction.
This arrangement ensures consistency across all C3 Wellness Spa locations but also limits the franchisee's autonomy in purchasing decisions and could potentially affect their costs and profit margins. Prospective franchisees should carefully consider these factors and evaluate the potential financial implications of being required to purchase exclusively from approved suppliers.