Does a reasonable right of Crave Cookies to disapprove a supplier constitute a designation of a source in Indiana?
Crave_Cookies Franchise · 2025 FDDAnswer from 2025 FDD Document
- **2.
Certain Provisions Modified.** Any provision of the Agreement which would have any of the following effects is hereby modified to the extent required for the Agreement to be in compliance with the Indiana Acts:
- (1) Requiring goods, supplies, inventories, or services to be purchased exclusively from the franchisor or sources designated by the franchisor where such goods, supplies, inventories, or services of comparable quality are available from sources other than those designated by the franchisor.
However, the publication by the franchisor of a list of approved suppliers of goods, supplies, inventories, or services or the requirement that such goods, supplies, inventories, or services comply with specifications and standards prescribed by the franchisor does not constitute designation of a source nor does a reasonable right of the franchisor to disapprove a supplier constitute a designation.
This subdivision does not apply to the principal goods, supplies, inventories, or services manufactured or trademarked by the franchisor.
Source: Item 23 — RECEIPTS (FDD pages 47–194)
What This Means (2025 FDD)
According to Crave Cookies' 2025 Franchise Disclosure Document, the Indiana Acts, specifically the Indiana Franchise Act and the Indiana Deceptive Franchise Practices Act, modify certain provisions of the franchise agreement to ensure compliance with Indiana law.
Specifically, the FDD clarifies that requiring franchisees to purchase goods, supplies, inventories, or services exclusively from Crave Cookies or designated sources is modified if comparable quality items are available from other sources. However, the FDD explicitly states that Crave Cookies' publication of a list of approved suppliers, the requirement that goods meet the franchisor's specifications, or a reasonable right to disapprove a supplier does not constitute a designation of a source. This exception does not apply to goods, supplies, inventories, or services manufactured or trademarked by Crave Cookies.
In practical terms, this means that while Crave Cookies can maintain standards and approve suppliers, a reasonable right to disapprove a supplier does not automatically force a franchisee to purchase exclusively from designated sources, as long as alternatives of comparable quality exist, according to Indiana law. However, for items that Crave Cookies manufactures or trademarks, this provision does not apply, giving Crave Cookies more control over those specific supplies.