Can Crab N Spice revoke past approvals of suppliers?

According to Crab N Spice's 2024 Franchise Disclosure Document, Crab N Spice can revoke previously approved suppliers. Specifically, Crab N Spice may grant approvals of new suppliers or revoke past approvals of suppliers by providing written notice to the franchisee or by updating their Manual. This means that a supplier that is approved today could be unapproved in the future.

This ability to revoke approval gives Crab N Spice significant control over the supply chain. While the FDD states that approvals and revocations are based on criteria such as capacity, quality, financial stability, reputation, and reliability, the specific criteria are not disclosed to franchisees. This lack of transparency could create uncertainty for franchisees, as they may be forced to switch suppliers unexpectedly if Crab N Spice revokes an approval.

For a prospective franchisee, this highlights the importance of understanding the approved supplier list and the potential for changes. It would be prudent to inquire about the typical duration of supplier approvals and the reasons why approvals have been revoked in the past. While Crab N Spice is not obligated to provide this information, asking these questions can help a franchisee assess the stability of the supply chain and the potential risks associated with supplier changes. Franchisees should also consider the potential costs and disruptions associated with switching suppliers if Crab N Spice revokes an approval.