Who pays for the facility audit of a proposed Chicken Guy supplier?
Chicken_Guy Franchise · 2025 FDDAnswer from 2025 FDD Document
If you propose to purchase any goods or materials (that you are not required to purchase from us, our affiliates or designated suppliers) from a supplier that we have not previously approved, you must submit to us a written request for such approval, or you must request that the supplier do so. We will provide our standards and specifications to you or to the proposed supplier, subject to the supplier's execution of a confidentiality agreement in a form acceptable to us. We have the right to require, as a condition of approval, that our representatives be permitted to inspect the supplier's facilities and that such information, specifications and samples as we reasonably designate be delivered to us and/or to an independent, certified laboratory designated by us for testing prior to granting approval. In addition to product testing, a facility audit may be required. A fee not to exceed our actual costs of reviewing the supplier or distributor and auditing the facility, if needed, may be charged by us and shall be paid by you. We will notify you within 60 days after receipt of your request as to whether you are authorized to purchase such products from that supplier, and if such authorization is granted, you may contract with the approved supplier. We may periodically require that the testing be performed again at your expense to ensure continued compliance with our specifications.
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 20–22)
What This Means (2025 FDD)
According to Chicken Guy's 2025 Franchise Disclosure Document, if a franchisee proposes a new supplier for goods or materials not already sourced from approved suppliers, the franchisee is responsible for covering the costs associated with the supplier approval process. Specifically, Chicken Guy has the right to require an inspection of the supplier's facilities as part of the approval process.
In addition to product testing, a facility audit may be required. Chicken Guy may charge a fee to cover the costs of reviewing the supplier or distributor and auditing the facility, if needed. This fee will not exceed Chicken Guy's actual costs and is to be paid by the franchisee.
This means that a prospective Chicken Guy franchisee needs to factor in potential costs for supplier audits when considering using a non-approved supplier. This cost is in addition to the franchisee's initial and ongoing expenses. The FDD states that after the franchisee submits a request, Chicken Guy will notify the franchisee within 60 days whether they are authorized to purchase from the proposed supplier. Chicken Guy may also periodically require re-testing of the supplier's products at the franchisee's expense to ensure continued compliance with Chicken Guy's specifications.