What is the consequence of a Card My Yard franchisee failing to comply with the sourcing provisions?
Card_My_Yard Franchise · 2025 FDDAnswer from 2025 FDD Document
term of this Agreement that a majority of the Card My Yard businesses then operated by us or our Affiliates have made or are utilizing best efforts to make such improvements.
E. Sourcing.
- (1) You agree to comply with all of our standards and specifications for the purchase of all inventory, supplies, materials, fixtures, furnishings, equipment, Computer Systems, and other products used or offered for sale at the Card My Yard business. If we have approved or designated suppliers (which may include us or our Affiliates or third party manufacturers, distributors and other sources) for any such item, you agree to obtain these items from those suppliers. Our approved or designated suppliers are those who demonstrate on a continuing basis the ability to meet our standards and specifications; who have adequate quality controls and the capacity to supply the needs of the Card My Yard business franchise network promptly and reliably over an extended period of time; and who have been approved in writing by us and who have not thereafter been disapproved by us. We may designate ourselves, our Affiliates or a third party as an approved or designated supplier, or as the sole approved or designated supplier of any item. You agree that we and our Affiliates may derive revenue based on your purchases and leases (including, without limitation, from charging you for products and services we or our Affiliates provide to you and from payments made to us or our Affiliates by suppliers that we designate or approve for some or all of our franchisees). We currently require you to purchase yard letters/signs (or related materials and equipment) totaling at least $500 each year from us.
- (2) If you wish to use any item or service that we have not yet evaluated or (for items that we require you to purchase from designated or approved suppliers) if you wish to purchase or lease any such item from a supplier that we have not yet approved, you must sub
Source: Item 23 — RECEIPTS (FDD pages 84–259)
What This Means (2025 FDD)
According to Card My Yard's 2025 Franchise Disclosure Document, franchisees must adhere to the franchisor's standards for purchasing inventory, supplies, materials, fixtures, equipment, computer systems, and other products used in the business. If Card My Yard has approved or designated specific suppliers, franchisees are required to purchase these items from those suppliers. These suppliers are chosen based on their ability to meet Card My Yard's standards, quality controls, capacity, and written approval. Card My Yard may designate themselves, their affiliates, or a third party as an approved supplier, even as the sole supplier for certain items. Franchisees are currently required to purchase at least $500 worth of yard letters/signs (or related materials and equipment) annually from Card My Yard.
If a franchisee wishes to use an item or service not yet evaluated by Card My Yard, or if they want to purchase from a non-approved supplier for items that must come from designated sources, they must submit a written request for approval. Purchasing or leasing such items from unapproved suppliers is prohibited unless written approval is granted.
While the FDD excerpt specifies the sourcing requirements and approval processes, it does not explicitly state the consequences of failing to comply with these sourcing provisions. A prospective franchisee should seek clarification from Card My Yard regarding the specific penalties or actions that may be taken if a franchisee violates the sourcing requirements outlined in the franchise agreement.