Is a Chocolate Bash franchisee required to purchase supplies from the franchisor?
Chocolate_Bash Franchise · 2024 FDDAnswer from 2024 FDD Document
[Item 8: RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES]
Us or our Affiliates 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
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.
Item 8 RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES
Generally
We have the right to require you to purchase or lease all goods, services, supplies, fixtures, equipment, inventory, computer hardware and software, real estate, or comparable items related to establishing or operating your business (1) either from us or our designee, or from suppliers approved by us, or (2) according to our specifications.
We estimate that the required purchases and leases to establish your business is 50% - 70% of your total purchases and leases to establish your business.
We estimate that the required purchases and leases of goods and services to operate your business is 50% to 60% of your total purchases and leases of goods and services to operate your business.
We currently do derive revenue from the required purchases and leases by franchisees. We derived $10,387 and 5% of our total revenue from required purchases and leases.
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 Chocolate Bash. These items include pancake mix, waffle mix, crepe mix, Belgium chocolate (milk-dark-white), pistachio spread, Karak tea, Turkish coffee, uniforms for staff, and specialty dine-in plates. This requirement ensures consistency and quality control across all Chocolate Bash locations.
For other items not purchased directly from Chocolate Bash, franchisees must purchase from approved suppliers. If a franchisee wishes to use a supplier not already on the approved list, they must request written approval from Chocolate Bash. The approval process involves evaluating the supplier's capacity, quality, financial stability, reputation, and reliability, as well as inspections, product testing, and performance reviews. Chocolate Bash will provide written notification of approval or disapproval within 30 days of the request.
Chocolate Bash also has the right to require franchisees to purchase or lease all goods, services, supplies, fixtures, equipment, inventory, computer hardware and software, real estate, or comparable items related to establishing or operating their business either from Chocolate Bash or its designee, or from suppliers approved by them, or according to their specifications. This broad right gives Chocolate Bash significant control over the sourcing of products and services used in the franchise. Chocolate Bash negotiates purchase arrangements with suppliers, including price terms, for the benefit of franchisees.
Chocolate Bash estimates that required purchases and leases to establish the business account for 50% to 70% of the total establishment costs. Furthermore, the required purchases and leases of goods and services to operate the business are estimated to be 50% to 60% of the total operational purchases and leases. In 2023, Chocolate Bash derived $10,387, representing 5% of its total revenue, from required purchases and leases by franchisees.