What is the significance of the 'unique character' of Carbone's pizza in relation to supplier restrictions?
Carbones_Pizzeria Franchise · 2025 FDDAnswer from 2025 FDD Document
CES OF PRODUCTS AND SERVICES**
Because of the unique character of Carbone's pizza, you may only purchase from our approved suppliers various items including all food ingredients in the production of pizzas. The reason for the requirement is that the recipes for these products are unique and original, and it is in your interest and the interest of other franchisees and of M & T Pizza that the taste, texture and other qualities of these products be as consistent as possible. The grant or revocation of approval for a particular supplier will be communicated directly to you. Revocation will generally only occur upon the failure of the supplier to meet our standards. If you would like us to consider approving a supplier or an alternative item that we have not approved, or for which we have not revoked our approval, you must provide us with all information we request regarding the supplier or item. We will then have 30 days from the date you provide us the information to consider the supplier. We do not make our criteria available for approving suppliers or items. We do not charge a fee for our investigation or approval. We will not consider approving a supplier or item for which we only have a single supplier or item.
We have the right to designate a single source or sources from whom you must purchase any required products and services, and we and/or our affiliates may be that single source or one or more of the sources. We and our affiliates may derive revenue from your purchases or leases of goods, services, supplies, fixtures, equipment, inventory, products and other items from our suppliers. We and our affiliates may receive rebates from various suppliers based upon franchisee purchases from the suppliers. These rebates may be based on a flat amount or percentage of franchisee purchases. Currently, these rebates range from $1 to $10 per case purchased depending upon the item purchased to 1-7% of the amount paid by the franchisee for the product, depending on the product. Our affiliate also receives a flat amount from one supplier to our franchise system. During our fiscal year ended October 31, 2024, our affiliate received $159,266 in revenue from rebates paid to it based on franchisee purchases, of which $30,000 was contributed to our Advertising Fund. This information is taken from our affiliate's internal financial statements.
We have sole suppliers for pizza and spaghetti sauce packets, certain seasonings, frozen doughballs, pizza sausage and all products or other items that are branded with our name or trademarks. Additionally, you may only use our sole approved design firm for creating and publishing advertising for your Restaurant.
All items to be purchased by you in the operation of your Restaurant, including ingredients, food stuffs, other food items, apparel, pizza boxes and other packaging, linens, flatware, supplies, furnishings, fixtures, insurance, point of sale system and other miscellaneous items must meet our standards as we may change them from time to time. Such standards typically relate to the quality and appearance of products so as to promote uniformity in all franchised restaurants. Any changes in the standards will be communicated to you.
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 12–13)
What This Means (2025 FDD)
According to Carbone's Pizzeria's 2025 Franchise Disclosure Document, the 'unique character' of its pizza is the primary justification for strict supplier controls. To maintain consistency in taste, texture, and quality across all franchise locations, franchisees are required to purchase various items, including all food ingredients used in pizza production, exclusively from Carbone's Pizzeria's approved suppliers. This requirement ensures that the recipes, which are described as unique and original, are followed precisely.
This restriction means that as a Carbone's Pizzeria franchisee, you will have limited flexibility in sourcing ingredients and other essential items. While this ensures uniformity, it also means you cannot seek out potentially cheaper or locally sourced alternatives without approval. Carbone's Pizzeria retains the right to designate single-source suppliers, including themselves or their affiliates, for required products and services. These restrictions are typical in franchise systems to maintain brand standards, but franchisees should carefully consider whether they are comfortable with these limitations.
Carbone's Pizzeria will communicate the grant or revocation of supplier approval directly to franchisees, with revocations generally occurring if a supplier fails to meet their standards. If a franchisee wants Carbone's Pizzeria to consider a new supplier or alternative item, they must provide all requested information, and Carbone's Pizzeria has 30 days to consider the supplier. However, Carbone's Pizzeria does not disclose the criteria for approving suppliers or items and will not consider approving a supplier or item for which they only have a single supplier or item. Franchisees should inquire about the specific criteria used to evaluate potential suppliers to better understand the approval process.
Furthermore, Carbone's Pizzeria and its affiliates may receive revenue or rebates from franchisee purchases from approved suppliers. During the fiscal year ended October 31, 2024, Carbone's Pizzeria's affiliate received $159,266 in revenue from rebates, with $30,000 contributed to the Advertising Fund. Franchisees should be aware of these financial arrangements, as they could influence the choice of suppliers and potentially impact the cost of goods. Franchisees can expect that items purchased to meet Carbone's Pizzeria's specifications will represent over approximately 90% of the total purchases to begin operations and between 70-90% of total expenses once operating.