Does Desi District Franchising LLC reserve the right to become a supplier to its franchisees in the future?

According to Desi District's 2024 Franchise Disclosure Document, Desi District Franchising LLC does reserve the right to become a supplier (or the sole supplier) of goods or services in the future. Currently, TAR Distributors, Inc., an affiliate of Desi District, is a supplier of merchandise, apparel, food product, and goods that franchisees are required to purchase.

This reservation of rights has significant implications for prospective Desi District franchisees. It means that the franchisee may be required to purchase goods or services directly from Desi District Franchising LLC in the future, potentially impacting their costs and sourcing options. While franchisees are currently required to purchase some food products and retail items from an affiliate, the franchisor retains the option to expand this requirement to other goods and services.

Franchisees do have the option to request approval for alternative suppliers, but Desi District retains the right to grant or revoke these approvals based on its own criteria. The criteria for approving suppliers are not disclosed to franchisees. Desi District will provide written notification of approval or disapproval within 30 days of the request. Desi District may also grant approvals of new suppliers or revoke past approvals by written notice or by updating their manual.