Can Casiola designate itself or its affiliates as exclusive suppliers of source restricted goods and services?

According to Casiola's 2024 Franchise Disclosure Document, Casiola has the right to designate itself or its affiliates as exclusive suppliers for certain goods and services that are deemed 'source restricted'. These are goods and services that must adhere to Casiola's specific standards and must be acquired from approved or designated suppliers. This designation can occur regardless of whether there are other competing suppliers available.

Casiola requires franchisees to purchase or lease specific source restricted goods and services to maintain quality and service standards. These standards and the list of approved suppliers are detailed in Casiola's manuals, which may be updated periodically through written or electronic communication. If a previously approved supplier fails to meet Casiola's standards, their approval will be revoked, and franchisees will be notified in writing.

Specifically, Casiola designates itself as the supplier for all booking services, the Property Management System, and contact center services. While Casiola and its affiliates are generally not approved suppliers for other source-restricted goods and services, Casiola retains the right to become an exclusive supplier in the future. If a franchisee wishes to use a non-approved supplier, they must submit a written request for approval, potentially incurring review and testing fees, and allowing Casiola to inspect the supplier's facilities. Casiola estimates that approximately 90% of the initial investment and 20% of ongoing operating expenses will be spent on these source-restricted goods and services.