Does Clean Your Dirty Face have the right to concentrate purchases with specific suppliers?
Clean_Your_Dirty_Face Franchise · 2025 FDDAnswer from 2025 FDD Document
We may concentrate purchases with one or more suppliers to obtain lower prices, advertising support and/or services for any group of CYDF Facial Bars franchised or operated by us or our affiliates. As of the Effective Date of this Agreement, we require you to purchase from our affiliates certain branded products, services, and retail merchandise that you must use in the operation of your Business and offer and sell to the customers of your Business; however, we or our affiliates have no obligation to continue supplying those products, services, and merchandise to you, and may we designate third-party suppliers for such purchases. We may also designate a single supplier for any product, service, Operating Asset, or other material, or approve a supplier only for certain products. You acknowledge and agree that we and/or our affiliates may derive revenue based on your purchases (including from charging you for products and services we or our affiliates provide to you and from promotional allowances, rebates, volume discounts and other payments, services or consideration we receive from suppliers that we designate or approve for some or all of our franchise owners). We and/or any of our affiliates may use such revenue or profit without restriction.
Approval of a supplier may be conditioned on requirements relating to product quality, prices, consistency, reliability, financial capability, labor relations, customer relations, frequency of delivery, concentration of purchases, standards of service, including prompt attention to
complaints, or other criteria and may be temporary, pending our continued evaluation of the supplier from time to time.
If you would like to purchase or use any products, services, supplies or materials from any unapproved supplier, you must submit to us a written request for approval of the proposed supplier prior to purchasing any such products, services, supplies or materials. We reserve the right to charge you a fee (not to exceed the reasonable cost of the research and inspection and the actual cost of the test) to make the evaluation. We have the right to inspect the proposed supplier's facilities and to require that product samples from the proposed supplier be delivered either directly to us or to a third party we designate for testing. We will notify you in writing of the approval or disapproval of the proposed supplier within a reasonable time after completion of the investigation. If we fail to respond within sixty (60) days, your request will be deemed denied. We may elect to withhold approval of the supplier, in our sole discretion and for any reason. You acknowledge that we are likely to reject your request for a new supplier without conducting any investigation if we have already designated an exclusive supplier for that product or service. We reserve the right to periodically re-inspect the facilities and products of any approved supplier and to revoke our approval if the supplier does not continue to meet any of our criteria. We also reserve the right to charge suppliers a royalty for the right to manufacture products for use in the CYDF Facial Bars.
Source: Item 22 — CONTRACTS (FDD page 54)
What This Means (2025 FDD)
According to the 2025 Clean Your Dirty Face Franchise Disclosure Document, Clean Your Dirty Face has the authority to concentrate purchases with specific suppliers. This means Clean Your Dirty Face can mandate that franchisees purchase goods and services from a limited number of approved suppliers. This is a common practice in franchising, allowing the franchisor to maintain quality control and potentially negotiate better pricing.
Clean Your Dirty Face may concentrate purchases with suppliers to obtain lower prices, advertising support, or services for any franchised or company-operated Clean Your Dirty Face Facial Bar. As of the effective date of the Franchise Agreement, franchisees must purchase certain branded products, services, and retail merchandise from Clean Your Dirty Face's affiliates. However, Clean Your Dirty Face or its affiliates are not obligated to continue supplying these products, and they may designate third-party suppliers for such purchases. Clean Your Dirty Face may also designate a single supplier for any product, service, operating asset, or other material, or approve a supplier only for certain products.
Clean Your Dirty Face and its affiliates may derive revenue from franchisee purchases, including from direct charges for products and services, promotional allowances, rebates, volume discounts, and other payments from designated or approved suppliers. This revenue or profit can be used without restriction. Approval of a supplier may depend on factors like product quality, prices, consistency, reliability, financial capability, labor relations, customer relations, delivery frequency, purchase concentration, and service standards. Approvals can be temporary while Clean Your Dirty Face evaluates the supplier.
If a franchisee wants to use an unapproved supplier, they must submit a written request for approval. Clean Your Dirty Face can charge a fee to evaluate the supplier, not exceeding the reasonable cost of research, inspection, and testing. Clean Your Dirty Face has the right to inspect the supplier's facilities and require product samples for testing. The franchisee will be notified in writing of the approval or disapproval within a reasonable time, but if Clean Your Dirty Face fails to respond within 60 days, the request is deemed denied. Clean Your Dirty Face can withhold approval at its sole discretion and may reject a request without investigation if an exclusive supplier is already designated. Clean Your Dirty Face can also periodically re-inspect approved suppliers and revoke approval if they no longer meet the criteria and can charge suppliers a royalty for the right to manufacture products for use in Clean Your Dirty Face Facial Bars.