Can Crown Gold Exchange update the manual to revoke past approvals of suppliers?
Crown_Gold_Exchange Franchise · 2024 FDDAnswer from 2024 FDD Document
rnative Suppliers
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.
Issuing Specifications and Standards
We issue specifications and standards to you for applicable aspects of the franchise in our Manual and/or in written directives. We may issue new specifications and standards for any aspect of our brand system, or modify existing specifications and standards, at any time by revising our Manual and/or issuing new written directives (which may be communicated to you by any method we choose). We will generally (but are not obligated to) issue new or revised specifications only after thorough testing in our headquarters, in company-owned outlets, and/or a limited market test in multiple units.
Revenue to Us and Our Affiliates
We currently do not derive revenue from the required purchases and leases by franchisees. However, the franchise agreement does not prohibit us from doing so.
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. Specifically, Crown Gold Exchange retains the right to modify the list of approved suppliers. This means that a supplier initially approved for use by franchisees can later be removed from the approved list.
Crown Gold Exchange can communicate these changes to franchisees either through direct written notice or by updating the Brand Standards Manual. This gives Crown Gold Exchange flexibility in managing its supply chain and ensuring that franchisees adhere to current standards. The FDD also states that Crown Gold Exchange may issue new specifications and standards for any aspect of its brand system, or modify existing specifications and standards, at any time by revising the manual or issuing new written directives.
For a prospective Crown Gold Exchange franchisee, this means that supplier relationships are not guaranteed to be permanent. Franchisees must stay informed of any changes to the approved supplier list, as they will be required to comply with these updates. While this provides Crown Gold Exchange with the ability to maintain quality and standards, it also introduces a degree of uncertainty for franchisees, who may need to adjust their sourcing practices based on Crown Gold Exchange's decisions.
Crown Gold Exchange does negotiate purchase arrangements with suppliers, including price terms, for the benefit of franchisees. Additionally, Crown Gold Exchange states that they do provide material benefit to franchisees based on their purchase of particular goods or services and their use of particular suppliers.