Does Crown Gold Exchange currently act as a supplier of goods or services that franchisees must purchase?
Crown_Gold_Exchange Franchise · 2024 FDDAnswer from 2024 FDD Document
Neither we nor any affiliate is currently a supplier of any good or service that you must purchase, although we reserve to the right to be a supplier (or the sole supplier) of a good or service in the future.
Specific Obligations
The following are our current specific obligations for purchases and leases:
- A. Real Estate. Your business location is subject to our approval and must meet our specifications. You must use reasonable efforts to have your landlord sign our form of Rider to Lease Agreement (attached to this disclosure document as Exhibit D).
- B. Insurance. You must obtain insurance as described in the Franchise Agreement and in our Brand Standards Manual, which includes (i) "Special" causes of loss coverage forms, including fire and extended coverage, crime, vandalism, and malicious mischief, on all property of the Business, for full repair and replacement value (subject to a reasonable deductible); (ii) Business interruption insurance covering at least 12 months of income; (iii) Commercial General Liability insurance, including products liability coverage, and broad form commercial liability coverage, written on an "occurrence" policy form in an amount of not less than $1,000,000 single limit per occurrence and $2,000,000 aggregate limit, (iv) Jeweler's Insurance coverage in an amount of not less than $1,000,000, and (v) Workers Compensation coverage as required by state law. Your policies (other than Workers Compensation) must list us and our affiliates as an additional insured, must include a waiver of subrogation in favor of us and our affiliates, must be primary and non-contributing with any insurance carried by us or our affiliates, and must stipulate that we receive 30 days' prior written notice of cancellation.
- C. Point-of-sale software and hardware, and related software and hardware. You must purchase (or lease) the point-of-sale software and hardware, and related software and hardware, that we specify, the primary operating software will be provided by us. See Item 11 for more details.
- D. Signage, Shelving, Store Décor. You must purchase the required signage, shelving and store decoration/decor that we require and specify. These specifications are detailed in the Brand Standards Manual.
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.
We do negotiate purchase arrangements with suppliers, including price terms, for the benefit of franchisees.
We do provide material benefit to you based on your purchase of particular goods or services and your use of particular suppliers.
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 15–17)
What This Means (2024 FDD)
According to Crown Gold Exchange's 2024 Franchise Disclosure Document, neither Crown Gold Exchange nor its affiliates currently act as a supplier of any good or service that franchisees are required to purchase. However, Crown Gold Exchange retains the right to become a supplier or the sole supplier of goods or services in the future.
Crown Gold Exchange does mandate that franchisees adhere to specific obligations regarding purchases and leases. Franchisees must ensure their business location meets Crown Gold Exchange's approval and specifications. They are also expected to use reasonable efforts to have their landlord sign Crown Gold Exchange's form of Rider to Lease Agreement. Additionally, franchisees are obligated to secure specific insurance coverage, point-of-sale software and hardware, and signage, shelving, and store décor that meet Crown Gold Exchange's requirements.
Crown Gold Exchange estimates that the required purchases and leases to establish the business account for 50% to 80% of the total establishment costs. Similarly, the ongoing required purchases and leases of goods and services to operate the business also constitute 50% to 80% of the total operational expenses. While Crown Gold Exchange does negotiate purchase arrangements with suppliers for the benefit of franchisees and provides material benefits based on the use of particular suppliers, franchisees should be aware that they may need to seek approval for alternative suppliers, and Crown Gold Exchange's criteria for approving suppliers are not disclosed.