Does Chocolate Bash require franchisees to purchase supplies from them?
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.
Revenue to Us and Our Affiliates
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.
Proportion of Required Purchases and Leases
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.
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 mandatory purchases include pancake mix, waffle mix, crepe mix, Belgium chocolate (milk, dark, and white), pistachio spread, Karak tea, Turkish coffee, uniforms for staff, and specialty dine-in plates. For all other items not purchased directly from Chocolate Bash, franchisees must use approved suppliers.
Chocolate Bash retains the right to mandate that franchisees purchase or lease all goods, services, supplies, fixtures, equipment, inventory, computer hardware and software, and real estate either from Chocolate Bash or its designee, or from suppliers approved by them, or according to their specifications. This gives Chocolate Bash significant control over the supply chain and the quality of products used in the franchise.
If a franchisee wishes to use a supplier not already on the approved list, they must seek written approval from Chocolate Bash. The franchisor will evaluate the supplier based on criteria such as capacity, quality, financial stability, reputation, and reliability, and may also conduct inspections, product testing, and performance reviews. Chocolate Bash will provide written notification of approval or disapproval within 30 days of the request. The franchisor can also modify existing specifications and standards at any time by revising their manual or issuing new written directives.
Chocolate Bash also derives revenue from these required purchases and leases by franchisees. In 2023, Chocolate Bash derived $10,387, which accounted for 5% of their total revenue, from these required purchases and leases. The estimated required purchases and leases to establish the business account for 50% to 70% of the total purchases and leases to establish the business. For operating the business, the required purchases are estimated to be 50% to 60% of the total.