Is Chocolate Bash a supplier of goods and inventory that franchisees must purchase?
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.
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, and white), pistachio spread, Karak tea, Turkish coffee, staff uniforms, and specialty dine-in plates. For other inventory, supplies, and some equipment not purchased directly from Chocolate Bash, franchisees must use approved suppliers.
Chocolate Bash has the right to mandate that franchisees 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 Chocolate Bash, or according to Chocolate Bash's specifications. This gives Chocolate Bash significant control over the sourcing of products and services used in the franchise.
In 2023, Chocolate Bash derived $10,387 and 5% of its total revenue from required purchases and leases by franchisees. The FDD estimates that required purchases and leases account for 50% to 70% of the total purchases and leases needed to establish the business, and 50% to 60% of the total purchases and leases required to operate the business. While Chocolate Bash does not currently receive payments from designated suppliers based on franchisee purchases, the franchise agreement does not prohibit them from doing so in the future. Chocolate Bash does negotiate purchase arrangements with suppliers, including price terms, for the benefit of franchisees, but does not provide any material benefit to franchisees based on their purchase of particular goods or services, or their use of particular suppliers.
Prospective franchisees should carefully consider these requirements and their potential impact on their operating costs and profitability. Understanding the specific criteria for supplier approval and the process for requesting approval of alternative suppliers is also crucial. Franchisees should also inquire about any potential changes to the list of required items or approved suppliers, as these could affect their business operations.