Does Chocolate Bash have the right to revoke supplier approvals?
Chocolate_Bash Franchise · 2024 FDDAnswer from 2024 FDD Document
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.
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, Chocolate Bash has the authority to revoke previously granted supplier approvals. Specifically, Chocolate Bash may grant approvals of new suppliers or revoke past approvals of suppliers. This revocation can be enacted through written notice to the franchisee or by updating the Chocolate Bash manual.
This ability to revoke supplier approvals gives Chocolate Bash significant control over the supply chain. While franchisees can request approval for alternative suppliers, Chocolate Bash ultimately decides which suppliers are acceptable. The criteria used to evaluate suppliers are not disclosed to franchisees, adding an element of uncertainty.
For a prospective Chocolate Bash franchisee, this means that a supplier initially approved could later be revoked, potentially disrupting their established supply chain. It is important to maintain open communication with Chocolate Bash regarding supplier performance and any potential issues. Franchisees should also stay informed about updates to the Chocolate Bash manual, as this is one method by which supplier approvals can be revoked. This level of franchisor control is not uncommon, as franchisors often seek to maintain quality and consistency across all franchise locations.