How might Crown Gold Exchange revoke past approvals of suppliers to Crown Gold Exchange franchisees?
Crown_Gold_Exchange Franchise · 2024 FDDAnswer from 2024 FDD Document
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.
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, Crown Gold Exchange can revoke previously approved suppliers. Crown Gold Exchange can revoke supplier approvals by providing written notice to the franchisee or by updating its manual.
This means that a Crown Gold Exchange franchisee may be required to switch suppliers even after a supplier has been approved. This could impact the franchisee's operations and costs if they have to find a new supplier on short notice. It is important to note that the criteria Crown Gold Exchange uses to approve suppliers are not available to the franchisee.
While Crown Gold Exchange does negotiate purchase arrangements with suppliers, including price terms, for the benefit of franchisees and provides material benefit based on the franchisee's purchase of particular goods or services and their use of particular suppliers, the potential for supplier changes could still create uncertainty for franchisees. Prospective franchisees should inquire about the typical frequency of supplier changes and the reasons why approvals might be revoked to better understand the potential impact on their business.