What criteria may Ella Cafe use to condition its approval of an alternate vendor?
Ella_Cafe Franchise · 2024 FDDAnswer from 2024 FDD Document
Franchisor may approve one or more suppliers for any goods or materials and may approve a supplier only as to certain goods or materials. Franchisor may concentrate purchases with one or more suppliers or distributors to obtain lower prices and/or the best advertising support and/or services for any group of Coffee Houses or any other group of Coffee House franchised or operated
by Franchisor or its Affiliates. Approval of a supplier may be conditioned on requirements relating to the frequency of delivery, reporting capabilities, standards of service, including prompt attention to complaints, or other criteria, and concentration of purchases, as set forth above, and may be temporary pending a further evaluation of such supplier by Franchisor.
If Franchisee proposes to purchase from an unapproved source, Franchisee must submit to Franchisor a written request for such approval, or must request the supplier to submit a written request on its own behalf. Franchisor reserves the right to require, as a condition of its approval, that its representatives be permitted to inspect the supplier's facilities, and that such information, specifications, and samples as Franchisor reasonably requires be delivered to Franchisor and/or to an independent, certified laboratory designated by Franchisor for testing prior to granting approval. A charge not to exceed the reasonable cost of the inspection and the actual cost of the test must be paid by Franchisee. Franchisor will notify Franchisee within 60 days of Franchisee's request as to whether or not Franchisee is authorized to purchase such products from that supplier. Franchisor reserves the right, at its option, to re-inspect the facilities and products of any such approved supplier and to revoke its approval of any supplier upon the suppliers' failure to meet Franchisor's criteria for quality and reliability.
Source: Item 22 — CONTRACTS (FDD page 50)
What This Means (2024 FDD)
According to Ella Cafe's 2024 Franchise Disclosure Document, Ella Cafe may approve suppliers for specific goods or materials. Ella Cafe can concentrate purchases with select suppliers to potentially secure lower prices, better advertising support, or superior services for any group of Ella Cafe locations, whether franchised or operated by Ella Cafe or its affiliates.
Ella Cafe may condition its approval of a supplier based on criteria such as the frequency of delivery, reporting capabilities, and standards of service, including how promptly the supplier addresses complaints. Approval may also depend on the concentration of purchases. Furthermore, approval can be temporary, pending further evaluation of the supplier by Ella Cafe.
If a franchisee wants to buy from a source that isn't approved, they must ask Ella Cafe in writing for permission, or the supplier must submit a written request on their own behalf. Ella Cafe can require that its representatives inspect the supplier's facilities and that the supplier provides the information, specifications, and samples that Ella Cafe reasonably requires for testing before approval. The franchisee will be charged for the reasonable cost of the inspection and the actual cost of the test. Ella Cafe will then notify the franchisee within 60 days whether they can buy from the supplier. Ella Cafe can re-inspect the facilities and products of any approved supplier and revoke approval if the supplier doesn't meet Ella Cafe's standards for quality and reliability.