Does Casiola reserve the right to designate a single supplier for service vehicles?
Casiola Franchise · 2024 FDDAnswer from 2024 FDD Document
- (5) Franchisor reserves the right to designate, from time to time, a single supplier and/or distributor for any services, products, equipment, supplies, or materials including, but not limited to, the System Supplies and Service Vehicles and to require Franchisee to use such a designated supplier exclusively, which exclusive designated supplier and/or distributor may be Franchisor and/or Franchisor's affiliates.
Franchisor and its affiliates may receive payments from suppliers and/or distributors on account of such supplier's or distributor's dealings with Franchisee and other franchisees of the System and that Franchisor may use all amounts so received without restriction and for any purpose, including Franchisor's profit;
- (6) If Franchisee proposes or requests that Franchisor consider the approval of products, services, equipment, supplies, suppliers and/or distributors for use in the Franchised Business where such products, services, equipment, supplies, suppliers and/or distributors are not, presently, at the time of Franchisee's request, approved for use in the System, Franchisee: (a) must provide Franchisor with a written request where Franchisee specifies the product, service, equipment, supply, supplier and/or distributor, the reason for Franchisee's request; (b) shall timely submit to Franchisor such information, reports, specifications, and samples as Franchisor, in Franchisor's Reasonable Business Judgment requests; and (c) shall pay to Franchisor a supplier evaluation fee per requested product, service, equipment, supply, supplier and/or distributor to be considered including, but not limited to, the supplier evaluation fees that Franchisor, in Franchisor's Reasonable Business Judgment, establishes and assesses based on, among other things, the administrative costs and time associated with evaluating, assessing and testing the proposed product, service, equipment, supply, supplier and/or distributor including, but not limited to Franchisor's internal employees and independent third parties engaged and/or retained by Franchisor for evaluation and testing.
Source: Item 23 — RECEIPTS (FDD pages 47–209)
What This Means (2024 FDD)
According to Casiola's 2024 Franchise Disclosure Document, Casiola retains the right to designate a single supplier or distributor for various services, products, equipment, supplies, or materials. This includes System Supplies and Service Vehicles. Casiola can mandate that franchisees exclusively use this designated supplier, which could be Casiola itself or its affiliates.
This provision means that as a Casiola franchisee, you may be required to purchase your service vehicles from a specific supplier chosen by Casiola. This designated supplier might be the franchisor or an affiliated company. This could impact your costs and potentially limit your choice of vehicle types or customization options.
Furthermore, Casiola and its affiliates may receive payments from these designated suppliers based on their dealings with franchisees. These payments can be used by Casiola without restriction, including for profit. While this arrangement is not uncommon in franchising, it's important to understand that Casiola benefits financially from these supplier relationships.
If a franchisee wishes to propose an alternative supplier, they must submit a written request to Casiola, provide all necessary information and samples, and pay a supplier evaluation fee. This fee covers the administrative costs and time associated with evaluating the proposed supplier. This process does not guarantee approval, and the franchisee bears the cost of the evaluation.