What are the specific obligations of a Dq Treat franchisee regarding compliance with ADQ's quality standards (Item 8 and Item 9)?
Dq_Treat Franchise · 2025 FDDAnswer from 2025 FDD Document
of Products and Services**
Required Purchases
You must maintain and comply with ADQ's quality standards to protect the uniform image and quality of products and services throughout the DQ® system.
While you are not required to purchase or lease real estate from ADQ or its affiliates, you must obtain ADQ's consent to the location of your store, and ADQ has the right but not the obligation to approve the lease for the store premises prior to execution. You must construct and equip your store according to the then-current design, specifications and standards and must ensure that your building plans comply with the Americans With Disabilities Act and all other federal, state and local laws.
You must modernize your building, premises, equipment, signage and grounds to conform to ADQ's then-current standards for similarly situated new DQ® restaurants when you renew your franchise, on transfer of the franchise under certain circumstances, and every 10 years or any shorter period required by any applicable lease or sublease for the premises.
You may only use or purchase products approved by ADQ that meet ADQ's specifications. For purposes of this Item 8, "products" includes products, services, ingredients, supplies, signage, fixtures, furnishings, advertising and sales promotion materials, and equipment (including hardware and software for a computerized electronic point-of-sale ("EPOS") system or other
computer systems, communications equipment, or electronic services providers). Approved products must meet ADQ's specifications, and are manufactured, provided or prepared by ADQ approved manufacturers, suppliers or distributors. ADQ periodically identifies approved products for use in DQ® locations, and has the right to periodically change the list of approved products, and to update and alter the specifications for approved products.
ADQ always has the right to designate a single approved manufacturer, supplier or distributor for the following products: (1) soft drinks; (2) third party branded products; (3) products relating to limited time offers and special promotions; (4) equipment, including EPOS equipment and all related point-of-sale and web based software and back-office hardware and software; (5) any product you purchase where ADQ does not receive a fee or payment from the manufacturer with respect to the sale of that product, other than payments from vendors for marketing; and (6) the Orange Julius® proprietary powders and frozen orange juice concentrate.
For other products not listed in (1) - (6) above, as long as there is not in place an agreement for a "unified purchasing program," a franchisee 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 ADQ's then current policies and procedures.
ADQ has received and offered proposals to create a unified purchasing program as a joint effort between ADQ and a cooperative association of DQ® restaurant and store operators, to benefit the entire DQ® system in the United States. For any period during which there is an agreement for a unified purchasing program: (1) ADQ will designate as approved the manufacturers, suppliers or distributors properly selected within the structure of that program; and (2) ADQ has the right to designate a single approved manufacturer, supplier and/or distributor of any approved products.
ADQ has currently designated ParTech, Inc. as the sole supplier of the required EPOS hardware and software that you must purchase for your restaurant. You will be required to sign an agreement with ParTech for the purchase of the equipment, software subscription services, installation and other services ("ParTech Participation Agreement") when you sign your franchise agreement. ADQ also has designated (a) Fiserv (formerly, FirstData Merchant Services) as the sole supplier of payment card processing and related services you must purchase, (b) Verifone as the sole supplier of certain payment card data encryption services that you must purchase; (c) ValueLink, LLC as the sole supplier of the gift cards and related services you must purchase, (d) Olo Inc. as the sole supplier of the DQ Mobile Ordering System; (e) Punchh Inc.
What This Means (2025 FDD)
According to the 2025 Dq Treat FDD, franchisees must adhere to ADQ's quality standards to maintain uniformity across the DQ® system. This includes using only ADQ-approved products that meet their specifications, which covers a wide range of items from ingredients and supplies to signage and equipment. ADQ has the right to change the list of approved products and update their specifications periodically. Franchisees are obligated to offer and sell only those goods and services that ADQ has approved, and failure to comply with these requirements or to meet product quality standards may result in termination of the franchise agreement.
Dq Treat franchisees must carry the menu items that ADQ designates for their business. ADQ determines the authorized menu based on factors like location, population density, existing business practices, and lease restrictions. ADQ can modify the approved menu and ingredients periodically through the Operations Manual, system bulletins, or other written communication, including electronic means. To the fullest extent the law allows, ADQ may require franchisees to offer items on the menu at specified maximum, minimum, or other prices. Franchisees might need to attend specialized training or purchase additional equipment to carry certain optional menu items and may have to pledge additional funds for advertising these products.
Furthermore, Dq Treat franchisees are obligated to modernize their building, premises, equipment, signage, and grounds to conform to ADQ's current standards for new DQ® restaurants when they renew their franchise, upon transfer of the franchise under certain circumstances, and every 10 years or any shorter period required by any applicable lease or sublease for the premises. ADQ estimates that the purchase or lease of equipment, signage, fixtures, furnishings, products, ingredients, supplies, advertising and sales promotion materials, and services which meet ADQ's specifications represent approximately 80% to 90% of the cost to establish the franchised business (excluding land) and 25% - 35% of the cost to operate the franchised business. While ADQ provides no material benefit based on the purchase of particular products or services, the franchise agreement mandates the use of ADQ-approved products and services.