How does Chop5 Salad Kitchen communicate changes to specifications and suppliers for source-restricted items?
Chop5_Salad_Kitchen Franchise · 2024 FDDAnswer from 2024 FDD Document
Source-Restricted Purchases and Leases - Generally
You must purchase or lease certain "source-restricted" goods and services for the development and operation of your Restaurant. By "source-restricted", we mean the good or service must meet our specifications and/or must be purchased from an approved or designated supplier (in some cases, an exclusive designated supplier, which may be us or an affiliate). The Manual includes our specifications and supplier list. We notify you of changes to our specifications and suppliers by email, updates to the Manual or other means of communication.
Supplier Criteria
Our criteria for evaluating a supplier include standards for quality, delivery, performance, design, appearance and price of the product or service as well as the dependability, reputation and financial viability of the supplier. Upon request, we will provide you with any objective specifications pertaining to our evaluation of a supplier or product, although certain important subjective criteria (e.g., product appearance, taste, design, functionality, etc.) are important to our evaluation but cannot be described in writing.
If you wish to purchase or lease a source-restricted item from a non-approved supplier, you must send us a written request for approval and submit all additional information we request. We may require that you send us samples from the supplier for testing. We may also require that we be allowed to inspect the supplier's facility.
We will use best efforts to notify you of our decision within 45 days after we receive your request for approval and all additional information and samples we require. If we fail to issue our written approval within the 45-day period, we are deemed to have disapproved the proposed supplier. We may periodically re-inspect the facilities and products of an approved supplier and revoke our approval if the supplier fails to meet our then-current criteria. You must reimburse us for all costs we incur to review products and suppliers you propose.
Current Source-Restricted Items
We estimate nearly 70% to 95% of the total purchases and leases to establish your Restaurant and 35% to 60% of ongoing operating expenses will consist of source-restricted goods or services, as further described below.
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 20–23)
What This Means (2024 FDD)
According to Chop5 Salad Kitchen's 2024 Franchise Disclosure Document, franchisees are required to purchase or lease certain "source-restricted" goods and services that meet the company's specifications from approved or designated suppliers. These source-restricted items are detailed in the Manual. Chop5 Salad Kitchen communicates any changes to these specifications and supplier lists via email, updates to the Manual, or other means of communication.
This means that as a Chop5 Salad Kitchen franchisee, you must stay informed about any updates from the franchisor regarding approved suppliers and product specifications. Failing to adhere to these requirements could result in non-compliance and potential penalties. It is important to regularly check your email and review any updates to the Manual to ensure you are using the correct suppliers and meeting the required standards.
The FDD also outlines the criteria Chop5 Salad Kitchen uses to evaluate suppliers, including standards for quality, delivery, performance, design, appearance, and price, as well as the supplier's dependability, reputation, and financial viability. While objective specifications are available upon request, subjective criteria such as product appearance, taste, design, and functionality are also considered but cannot be described in writing. If a franchisee wishes to use a non-approved supplier, they must submit a written request for approval, provide any additional information requested, and potentially send samples for testing or allow facility inspections. Chop5 Salad Kitchen will use best efforts to notify the franchisee of their decision within 45 days after receiving the request and all required information. Failure to issue written approval within this period is deemed a disapproval. Franchisees are responsible for reimbursing Chop5 Salad Kitchen for all costs incurred in reviewing proposed products and suppliers.
The FDD estimates that 70% to 95% of the total purchases and leases to establish a Chop5 Salad Kitchen restaurant and 35% to 60% of ongoing operating expenses will consist of source-restricted goods or services. This highlights the importance of understanding and adhering to the franchisor's sourcing requirements to manage costs and maintain brand standards.