Can Crisp & Green designate sources that a franchisee must use?
Crisp_Green Franchise · 2024 FDDAnswer from 2024 FDD Document
We may limit the number of approved suppliers or brands with whom you may deal, designate sources that you must use, and/or refuse any of your requests for any reason, including that we have already designated an exclusive source (which in the future might be us or our affiliate) for a particular product or service or if we believe that doing so is in the best interests of the System.
As of the date of this disclosure document, we also maintain specific suppliers as the sole source of supply for certain foods, ingredients, beverages, supplies, and other products and services; you must purchase and maintain our designated POS system hardware and software from a single supplier; and you must use our designated architectural vendor for creation of the architectural plans for your Franchised Restaurant as described above. We may also require you to use a designated digital marketing vendor for digital marketing services and a designated vendor for public relations services.
If you propose to use any brand and/or supplier which is not then approved by us, you must first notify us and submit sufficient information, specifications and samples concerning such brand and/or supplier so that we can decide whether such brand complies with our specifications and standards and/or such supplier meets our approved supplier criteria. You must pay us a $2,500 fee at the time you submit any request to approve an unapproved supplier or product as reasonable fees to cover our investigation costs. We will notify you of our decision within a reasonable period of time.
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 26–31)
What This Means (2024 FDD)
According to Crisp & Green's 2024 Franchise Disclosure Document, Crisp & Green has the authority to designate specific sources that franchisees must use for various products and services. This includes the ability to mandate the use of a single supplier for certain items. They can also designate an exclusive source for a particular product or service, potentially including themselves or an affiliate.
This means that as a Crisp & Green franchisee, you may be required to purchase certain items, such as food, ingredients, beverages, supplies, and the POS system, from specific, approved suppliers. You are also obligated to use Crisp & Green's designated architectural vendor for the creation of architectural plans for your Franchised Restaurant, as well as potentially a designated digital marketing vendor and a designated vendor for public relations services. Crisp & Green may revise the list of approved suppliers and supplies at their discretion.
If a franchisee wishes to use a supplier or brand not already approved, they must seek approval from Crisp & Green, which involves submitting information, specifications, and samples. A fee of $2,500 is required to cover the investigation costs associated with this request. Crisp & Green will then assess whether the proposed supplier or brand meets their standards, considering factors like the ability to conform to specifications, reputation, financial condition, and contribution to system uniformity. Crisp & Green has the right to refuse any request for any reason.