If Casiola approves a new product, is the franchisee obligated to sell it?
Casiola Franchise · 2024 FDDAnswer from 2024 FDD Document
confusion as to the Licensed Marks, determining Operating Market markets, minimizing potential customer confusion as to the location of Casiola Businesses, expanding brand awareness of the Licensed Marks, implementing marketing and accounting control systems, approving products, services, supplies and equipment. The Franchisee has agreed, and you agree, that when a decision, determination, action and/or choice is made by us in our Reasonable Business Judgment that such decision, determination, action or choice made by us takes precedence and prevails, even if other alternatives, determinations, actions and/or choices are reasonable or arguably available and/or preferable. Franchisee has agreed, and you agree, that in connection with any decision, determination, action and/or choice made by us in our Reasonable Business Judgment as franchisor that: (a) we possesses a legitimate interest in seeking to maximize our profits; (b) we shall not be required to consider Franchisee's or your individual economic or business interests as compared to the overall System; and (c) should we economically benefit from such decision, determination, action and/or choice that such economic benefit to us shall not be relevant to demonstrating that we did not exercise reasonable business judgment with regard to our obligations under the Franchise Agreement and/or with regard to the System. Franchisee agreed and you agree that neither Franchisee and/or any third party, including, but not limited to, any third party acting as a trier of fact, shall substitute Franchisee's or such third party's judgment for our Reasonable Business Judgment. Franchisee agreed, and you agree, that should Franchisee challenge our Reasonable Business Judgment in any legal proceeding that Franchisee shall possess the burden of demonstrating, by clear and convincing evidence, that we failed to exercise our Reasonable Business Judgment.
Source: Item 16 — RESTRICTIONS ON WHAT THE FRANCHISEE MAY SELL (FDD page 35)
What This Means (2024 FDD)
The 2024 Casiola Franchise Disclosure Document states that Casiola approves products, services, supplies, and equipment. The franchisee agrees that when a decision is made by Casiola in its reasonable business judgment, that decision takes precedence and prevails. This is the case even if other alternatives are reasonable or preferable.
Casiola is not required to consider the franchisee's individual economic or business interests compared to the overall system. If Casiola economically benefits from a decision, that benefit is not relevant to demonstrating whether Casiola exercised reasonable business judgment. The franchisee cannot substitute their judgment for Casiola's reasonable business judgment.
If a franchisee challenges Casiola's reasonable business judgment in a legal proceeding, the franchisee has the burden of demonstrating, by clear and convincing evidence, that Casiola failed to exercise its reasonable business judgment. This indicates that if Casiola approves a new product, the franchisee is obligated to sell it.