Is a Chocolate Bash franchisee required to purchase inventory from the franchisor?
Chocolate_Bash Franchise · 2024 FDDAnswer from 2024 FDD Document
tes as Supplier
We are a supplier of some of the goods and inventory which you must purchase.
These are the items which will be purchased directly from us:
- 1- Pancake mix
- 2- Waffle mix
- 3- Crepe mix
- 4- Belgium chocolate ( milk-dark-white )
- 5- Pistachio spread
- 6- Karak tea
- 7- Turkish coffee
- 8- Uniforms for Staff
- 9 Specialty Dine In Plates
Ownership of Suppliers
Outside of your requirement to purchase some items directly from us or our Affiliates, None of our officers owns an interest in any supplier to our franchisees.
Alternative Suppliers
If you want to use a supplier that is not on our list of approved suppliers, you must request our approval in writing. We will grant or revoke approvals of suppliers based on criteria appropriate to the situation, which may include evaluations of the supplier's capacity, quality, financial stability, reputation, and reliability; inspections; product testing, and performance reviews. Our criteria for approving suppliers are not available to you. We permit you to contract with alternative suppliers who meet our criteria only if you request our approval in writing, and we grant approval. There is no fee for us to review or approve an alternate supplier. We will provide you with written notification of the approval or disapproval of any supplier you propose within 30 days after receipt of your request. We may grant approvals of new suppliers or revoke past approvals of suppliers on written notice to you, or by updating our Manual.
Issuing Specifications and Standards
We issue specifications and standards to you for applicable aspects of the franchise in our Manual and/or in written directives. We may issue new specifications and standards for any aspect of our brand system, or modify existing specifications and standards, at any time by revising our Manual and/or issuing new written directives (which may be communicated to you by any method we choose).
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 15–17)
What This Means (2024 FDD)
According to Chocolate Bash's 2024 Franchise Disclosure Document, franchisees are required to purchase certain goods and inventory directly from the franchisor. These items include pancake mix, waffle mix, crepe mix, Belgium chocolate (milk-dark-white), pistachio spread, Karak tea, Turkish coffee, staff uniforms, and specialty dine-in plates. This requirement ensures consistency in product quality and brand standards across all Chocolate Bash locations.
Chocolate Bash estimates that required purchases and leases to establish the business account for 50% to 70% of the franchisee's total initial purchases and leases. Furthermore, the FDD states that ongoing required purchases and leases of goods and services to operate the business are estimated to be 50% to 60% of the franchisee's total operational purchases and leases. In 2023, Chocolate Bash derived $10,387 and 5% of its total revenue from these required purchases and leases by franchisees.
While franchisees are obligated to buy specific items from Chocolate Bash, they can request approval to use alternative suppliers for other goods. To do so, a franchisee must submit a written request, and Chocolate Bash will evaluate the proposed supplier based on criteria such as capacity, quality, financial stability, reputation, and reliability. Chocolate Bash will provide written notification of approval or disapproval within 30 days of receiving the request, and there is no fee for this review process. Chocolate Bash may also issue or modify specifications and standards for any aspect of the brand system, communicating these changes through the Manual or written directives.