For a Dq Treat franchise, what happens if unapproved equipment is installed?
Dq_Treat Franchise · 2025 FDDAnswer from 2025 FDD Document
- (C) Company has the right to approve the manufacturer, supplier and/or distributor of any approved products (or the ingredients of any approved products), approved services and any approved equipment. Under all circumstances, Company has the right to designate a single approved manufacturer, supplier and/or distributor of:
- (1) Soft drink products;
- (2) Third party branded products for use in Licensee's Restaurant;
- (3) Products relating to limited time offers and special promotions;
- (4) Equipment, including the EPOS System and Computer Systems, and all related software and back-office hardware and software;
- (5) Any product, ingredient, service or equipment where Company does not receive any fee or payment with respect to the sale of that product, ingredient, service or equipment, other than payments from vendors for marketing; and
- (6) The Powders and frozen orange juice concentrate.
- (D) Company has the right to designate a single approved manufacturer, supplier and/or distributor of any other approved products (or the ingredients of any approved products), approved services and any approved equipment but for products, services, and equipment not described in sections 6.4(C) (1) - (6), as long as there is not in place an agreement for a unified purchasing program between Company and a cooperative association of DQ® restaurant and store operators to benefit the entire Franchise System in the United States, Licensee may make written request for approval of a specific product, service, or piece of equipment of an additional, qualified manufacturer, supplier or alternate distributor, pursuant to Company's then current policies and procedures.
Source: Item 17 — The following paragraph is added to the end of Item 17 of the Disclosure Document: (FDD pages 70–378)
What This Means (2025 FDD)
The 2025 Dq Treat FDD states that Dq Treat has the right to approve the manufacturer, supplier, and/or distributor of any approved equipment. This includes the EPOS (Electronic Point of Sale) system, computer systems, and all related software and back-office hardware and software.
Dq Treat can designate a single approved manufacturer, supplier, or distributor for specific items such as soft drink products, third-party branded products, products for limited-time offers, the EPOS system, and certain powders and frozen orange juice concentrate. For other products, services, and equipment not specifically listed, a franchisee can request approval of an additional manufacturer, supplier, or distributor, provided there isn't a unified purchasing program in place between Dq Treat and a cooperative association of DQ restaurant and store operators.
If a Dq Treat franchisee installs unapproved equipment, they would be in violation of the franchise agreement. While the FDD does not explicitly state the consequences of installing unapproved equipment, it is reasonable to assume that Dq Treat could take corrective action, potentially including requiring the franchisee to replace the unapproved equipment with approved equipment, and potentially assessing penalties or terminating the franchise agreement if the franchisee does not comply.