Is there a restriction preventing Desi District from requiring franchisees to purchase all goods and services from Desi District or its affiliates?
Desi_District Franchise · 2024 FDDAnswer from 2024 FDD Document
[Item 8: RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES]
Item 8 RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES
Generally
We have the right to require you to purchase or lease all goods, services, supplies, fixtures, equipment, inventory, computer hardware and software, real estate, or comparable items related to establishing or operating your business (1) either from us or our designee, or from suppliers approved by us, or (2) according to our specifications.
Specific Obligations
The following are our current specific obligations for purchases and leases:
- 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. See Item 11 for more details.
- D. Food Products and Inventory. You must purchase required food product from our affiliate, TAR Distributors, Inc. and our approved vendors as prescribed. See our Brand Standards/Operations Manual for details.
- E. Operating Equipment, Furniture, Fixtures. You will be required to purchase the furniture, fixtures and equipment needed to open and operate your Eatery and Market location from our approved vendors and according to our standards and specifications.
- F. Branding, Signage and Marketing Materials. You will be required to purchase the signage, branded items and marketing materials from our Affiliate and approved vendors and suppliers and according to our brand standards and specifications.
Us or our Affiliates as Supplier
Our affiliate, TAR Distributors, Inc. is currently a supplier of merchandise, apparel, food product and goods that you must purchase, and we reserve the right to be a supplier (or the sole supplier) of goods or services in the future.
Alternative 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.
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 26–29)
What This Means (2024 FDD)
According to Desi District's 2024 Franchise Disclosure Document, Desi District has the right to require franchisees to purchase or lease all goods, services, supplies, fixtures, equipment, inventory, computer hardware and software, real estate, or comparable items related to establishing or operating their business either from Desi District or its designee, or from suppliers approved by them, or according to their specifications.
Specifically, franchisees must purchase point-of-sale software and hardware that Desi District specifies. They are also required to purchase food products from Desi District's affiliate, TAR Distributors, Inc., and other approved vendors. Additionally, franchisees must buy furniture, fixtures, and equipment from approved vendors, and branding, signage, and marketing materials from Desi District's affiliate and approved vendors.
Desi District's affiliate, TAR Distributors, Inc., is a current supplier of merchandise, apparel, food product, and goods that franchisees must purchase. Desi District also reserves the right to be a supplier (or the sole supplier) of goods or services in the future. However, franchisees can request approval to use alternative suppliers in writing, and Desi District will grant or revoke approvals based on criteria such as the supplier's capacity, quality, financial stability, reputation, and reliability. There is no fee for Desi District to review or approve an alternate supplier, and they will provide written notification of approval or disapproval within 30 days after receiving the request.