What rights does Chicken Guy have as a condition of approving a new supplier proposed by a Chicken Guy franchisee?
Chicken_Guy Franchise · 2025 FDDAnswer from 2025 FDD Document
If Franchisee proposes to purchase any goods or materials (that Franchisee is not required to purchase from Chicken Guy, an affiliate of Chicken Guy or a designated supplier) from a supplier that Chicken Guy has not previously approved, Franchisee shall submit to Chicken Guy a written request for such approval, or shall request the supplier to do so itself.
Chicken Guy has the right to require, as a condition of its approval, that its representatives be permitted to inspect the supplier's facilities, and that such information, specifications and samples as Chicken Guy reasonably designates be delivered to Chicken Guy and/or to an independent, certified laboratory designated by Chicken Guy for testing prior to granting approval.
A charge not to exceed the Chicken Guy's actual costs of reviewing the supplier or distributor and auditing the facility, if needed, shall be paid by Franchisee.
Chicken Guy will notify Franchisee within 60 days of Franchisee's request as to whether Franchisee is authorized to purchase such products from that supplier.
Chicken Guy reserves the right, at its option, to re-inspect the facilities and products of any such approved supplier and to revoke its approval upon the suppliers' failure to continue to meet any of the foregoing criteria.
Source: Item 22 — CONTRACTS (FDD page 50)
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 required to be purchased from Chicken Guy or its designated suppliers, Chicken Guy has specific rights regarding the approval process. Chicken Guy can require that its representatives inspect the supplier's facilities. Additionally, Chicken Guy can demand that the franchisee or the supplier provide information, specifications, and samples for testing, potentially using an independent, certified laboratory.
As a condition of approval, Chicken Guy can also charge the franchisee for the costs associated with reviewing the supplier and auditing the facility, if necessary. This charge will not exceed Chicken Guy's actual costs. Chicken Guy is obligated to notify the franchisee of its decision within 60 days of the request.
Even after initial approval, Chicken Guy retains the right to re-inspect the facilities and products of any approved supplier. Chicken Guy can revoke its approval if the supplier fails to continue meeting the established criteria. This ongoing oversight ensures that all suppliers meet Chicken Guy's standards for quality and consistency.