What rights does Chicken Guy have regarding inspection of a proposed supplier's facilities?
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 using a new supplier for goods or materials not already mandated to be purchased from Chicken Guy, its affiliates, or designated suppliers, a specific approval process must be followed. The franchisee or the proposed supplier needs to submit a written request for approval. Chicken Guy will then provide its standards and specifications, contingent upon the supplier signing a confidentiality agreement.
Chicken Guy has the right to inspect the supplier's facilities as a condition of approval. They can also request that the supplier provide information, specifications, and samples for testing, either to Chicken Guy directly or to an independent, certified laboratory. In addition to product testing, Chicken Guy may require a facility audit. The franchisee is responsible for covering the costs associated with reviewing the supplier and auditing the facility, with the fee not exceeding Chicken Guy's actual costs.
Chicken Guy will notify the franchisee of its decision within 60 days of receiving the request. If approved, the franchisee can then contract with the supplier. To ensure continued compliance with Chicken Guy's specifications, the company may periodically require repeat testing at the franchisee's expense. This process allows Chicken Guy to maintain quality control and consistency across all its franchise locations, while also providing franchisees with the flexibility to propose new suppliers under certain conditions.