Can Crisp & Green refuse a franchisee's request for a supplier or brand for any reason?
Crisp_Green Franchise · 2024 FDDAnswer from 2024 FDD Document
We apply the following general criteria in approving a proposed supplier or brand: (i) the ability to make products or provide services in conformity with our specifications; (ii) the reputation and integrity of the supplier or brand; (iii) the financial condition and insurance coverage of the supplier; and (iv) System uniformity. Determinations of whether a supplier or brand meets our specifications and quality and safety standards will be made by us in our sole discretion. We have no obligation to approve any supplier or brand. 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. We are not required to make available to you or to any supplier our criteria for product or supplier approval if we deem such criteria to be confidential.
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 refuse a franchisee's request for a supplier or brand for any reason. To propose a brand or supplier not already approved, a franchisee must notify Crisp & Green and submit the necessary information, specifications, and samples for review. A fee of $2,500 is required to cover investigation costs.
Crisp & Green will assess the proposed supplier or brand based on criteria such as the ability to meet specifications, reputation, financial condition, insurance coverage, and contribution to system uniformity. However, the document explicitly states that Crisp & Green is under no obligation to approve any supplier or brand.
Crisp & Green retains the right to limit the number of approved suppliers or brands, designate exclusive sources, or refuse a franchisee's request for any reason. This includes situations where an exclusive source has already been designated (potentially Crisp & Green or an affiliate) or if Crisp & Green believes refusal is in the best interest of the system. Crisp & Green is not required to disclose its criteria for product or supplier approval if deemed confidential. This gives Crisp & Green significant control over the supply chain and product standards within the franchise system.
Prospective franchisees should be aware that Crisp & Green estimates approximately 95% of initial purchases and over 90% of ongoing costs will be from approved or designated suppliers. This highlights the importance of understanding and agreeing with Crisp & Green's supplier selection process and the potential limitations on sourcing products and services independently.