What are the implications of Crave Cookies requiring franchisees to purchase goods from approved suppliers (Item 8) on the franchisee's obligations to maintain quality standards (Item 9)?
Crave_Cookies Franchise · 2025 FDDAnswer from 2025 FDD Document
ur Affiliates as Supplier
Our affiliate is currently a supplier of a good or service that you must purchase, and we reserve the right to be a supplier (or the sole supplier) of a good or service in the future. Franchisee will purchase proprietary boxes from Crave Cookies Franchising, LLC.
Ownership of Suppliers
Our officers do not own an interest in any suppliers outside of the requirement to purchase the proprietary boxes and other merchandise from Crave Cookies Franchising, LLC.
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. We may issue new specifications and standards for any aspect of our brand system, or modify existing specifications and standards, at any time by revising our Manual and/or issuing new written directives (which may be communicated to you by any method we choose). We will generally (but are not obligated to) issue new or revised specifications only after thorough testing in our headquarters, in company-owned outlets, and/or a limited market test in multiple units.
Revenue to Us and Our Affiliates
We will derive revenue from the required purchases and leases by franchisees. Our total revenue in the prior fiscal year was $2,413,050. Our revenue from all required purchases and leases of products and services by franchisees in the prior fiscal year was $632,828.
Proportion of Required Purchases and Leases
We estimate that the required purchases and leases to establish your business are 50% to 80% of your total purchases and leases to establish your business.
We estimate that the required purchases and leases of goods and services to operate your business are 50% to 80% of your total purchases and leases of goods and services to operate your business.
Payments by Designated Suppliers to Us
We currently receive payments from designated suppliers based on purchases by you or other franchisees. The franchise agreement does not prohibit us from doing so.
Purchasing or Distribution Cooperatives
No purchasing or distribution cooperative currently exists.
Negotiated Arrangements
We do negotiate purchase arrangements with suppliers, including price terms, for the benefit of franchisees. For example, we currently have negotiated purchase contracts for items such as chocolate, butter and containers. These contracts currently save our franchisees up to 46%.
Item 9 FRANCHISEE'S OBLIGATIONS
This table lists your principal obligations under the franchise and other agreements. It will help you find more detailed information about your obligations in these agreements and in other items of this disclosure document.
| Obligation | Section in agreement | Disclosure document item |
|---|---|---|
| a. Site selection and acquisition/lease | Franchise Agreement (FA): §§ 6.1, 6.2 Multi-Unit Development Agreement (MUDA): Not Applicable | Item 11 |
| b. Pre-opening purchase/leases | FA: §§ 6.2, 6.3 MUDA: Not Applicable | Items 5, 7, 8 and 11 |
| c. Site development and other pre-opening | FA: Article 6 | Items 5, 7, 8 and 11 |
| requirements | MUDA: §§1(a), 3 | |
| d. Initial and ongoing training | FA: §§ 5.4, 6.4, 7.6 MUDA: Not Applicable | Items 5, 6, 8 and 11 |
| e. Opening | FA: §§ 6.5, 6.6 MUDA: §1(a) | Items 7, 8 and 11 |
| f. Fees | FA: Article 4, §§ 5.5, 7.8, 10.5, 11.2, 11.3, 15.2, 16.1, 17.6 MUDA: §1(a) | Items 5, 6 and 7 |
| g. Compliance with standards and policies/operating manual | FA: §§ 6.3, 7.1, 7.3, 7.5, 7.9 –7.13, 7.15, 10.1, 10.4, 11.1 MUDA: Article 1 | Items 8, 11 and 14 |
| h. Trademarks and proprietary information | FA: Article 12, § 13.1 MUDA: Not Applicable | Items 13 and 14 |
| i. |
What This Means (2025 FDD)
According to Crave Cookies's 2025 Franchise Disclosure Document, franchisees are required to purchase certain goods and services from approved or designated suppliers, which includes the potential for purchasing proprietary boxes from Crave Cookies Franchising, LLC. This mandate ensures uniformity and quality control across all franchise locations, as Crave Cookies retains the right to be the sole supplier of certain goods or services. This restriction on suppliers directly impacts a franchisee's obligation to comply with Crave Cookies's system standards, as outlined in Article 7.1 of the franchise agreement, ensuring consistent product quality and brand reputation.
To maintain quality standards, Crave Cookies may issue specifications and standards for all aspects of the franchise through their manual or written directives, which they can revise at any time. Franchisees are obligated to adhere to these standards, including those related to products, services, and methods of sale, offering only products and services prescribed by Crave Cookies. This includes following specific recipes with authorized ingredients and preparing food in a high-quality manner that meets or exceeds customer expectations and system standards. Non-compliance can result in fines, as detailed in the Operations Manual.
If a franchisee wishes to use an alternative supplier, they must seek written approval from Crave Cookies, which may evaluate the supplier's capacity, quality, financial stability, reputation, and reliability. Crave Cookies will provide written notification of approval or disapproval within 30 days of the request. Furthermore, Crave Cookies is not liable for any claims or losses related to products or services provided by approved vendors, including defects, delays, or unavailability. Franchisees are also required to comply with product recalls, ceasing the use or sale of any recalled item and following instructions from Crave Cookies or the vendor regarding the recall, repair, or replacement of the item at their own expense. These stipulations ensure that franchisees maintain the quality and safety standards expected by Crave Cookies, reinforcing brand consistency and customer satisfaction.