Is Casiola obligated to designate specific suppliers for System Supplies?
Casiola Franchise · 2024 FDDAnswer from 2024 FDD Document
-
- System Supplies You must maintain an initial and ongoing inventory of System Supplies. You must purchase the System Supplies, as designated by us, from us, our affiliates, and/or our designated suppliers.
We require that you purchase or lease certain source restricted goods and services for the development and operation of your Casiola Business. Source restricted goods and services are goods and services that must meet our specifications and/or must be purchased from an approved or designated supplier. We may designate a supplier (which may include us or our affiliates) as the exclusive supplier for the System. Our specifications and list of approved and designated suppliers is contained in our Manuals. We will notify you of any changes to our specifications or list of approved or designated suppliers. If we have previously approved a supplier, and their standards fall below our designated standards, we will revoke our approval. We will notify you in writing of us
If, in the Manuals, we do not designate a supplier for a particular item, you will purchase all such products, supplies and services from suppliers who meet our specifications and standards.
We estimate that your purchase of goods and services from suppliers according to our specifications, including your purchase of goods or services from our designated exclusive suppliers to represent approximately 90% of your total purchases and leases in establishing the Franchised Business and approximately 20% of the on-going operating expenses of the Franchised Business.
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 20–24)
What This Means (2024 FDD)
According to Casiola's 2024 Franchise Disclosure Document, Casiola requires franchisees to purchase System Supplies, as designated by them, from Casiola, its affiliates, and/or its designated suppliers. Casiola maintains control over the sources of products and services used in the Casiola business. Franchisees are required to purchase or lease certain goods and services that meet Casiola's specifications from approved or designated suppliers. These are referred to as 'source restricted goods and services.' Casiola may designate itself or its affiliates as the exclusive suppliers for the System.
Casiola's specifications and the list of approved and designated suppliers are detailed in their Manuals, and franchisees will be notified of any changes. If a previously approved supplier's standards fall below Casiola's, the approval will be revoked, and the franchisee will be notified in writing. Casiola formulates and modifies standards based on industry experience and management decisions.
If Casiola does not designate a supplier in the Manuals for a particular item, franchisees must purchase those products, supplies, and services from suppliers who meet Casiola's specifications and standards. Casiola estimates that purchases from designated exclusive suppliers will represent approximately 90% of the total purchases and leases in establishing the Franchised Business and approximately 20% of the on-going operating expenses of the Franchised Business.