Does the Endless Summer Sweets franchisor control the franchisee or its business?
Endless_Summer_Sweets Franchise · 2024 FDDAnswer from 2024 FDD Document
.** Franchisee shall pay all vendors and suppliers in a timely manner. Franchisee shall pay all taxes when due. If Franchisee borrows money, it shall comply with the terms of its loan and make all loan payments when due. If Franchisee leases the Location, Franchisee shall comply with its lease for the Location and make all rent payments when due.
- 7.17 Public Relations. Without Franchisor's prior written approval, which will not be unreasonably withheld, Franchisee shall not make any public statements, including without limitation interviews or issuing press releases, regarding Franchisor, the Business, or any particular incident or occurrence related to the Business.
- 7.18 Association with Causes. Franchisee shall not in the name of the Business (i) donate money, products, or services to any charitable, political, religious, or other organization, or (ii) act in support of any such organization, without Franchisor's prior written approval, which will not be unreasonably withheld.
- 7.19 No Other Activity Associated with the Business. Franchisee shall not engage in any business or other activity at the Location other than operation of the Endless Summer Sweets Business. Franchisee shall not use assets of the Business for any purpose other than the Business. If Franchisee is an entity, the entity shall not own or operate any other business except the Endless Summer Sweets businesses.
- 7.20 No Third-Party Management. Franchisee shall not engage a third-party management company to manage or operate the Business without the prior written approval of Franchisor, which will not be unreasonably withheld.
- 7.21 Identification. Franchisee must identify itself as the independent owner of the Business in the manner prescribed by Franchisor. Franchisee must display at the Business signage prescribed by Franchisor identifying the Location as an independently owned franchise.
- 7.22 Business Practices. Franchisee, in all interactions with customers, employees, vendors, governmental authorities, and other third parties, shall be honest and fair. Franchisee shall comply with any code of ethics or statement of values from Franchisor. Franchisee shall not take any action which may injure the goodwill associated with the Marks.
ARTICLE 7. SUPPLIERS AND VENDORS
8.1 Generally. Franchisee shall acquire all products and services required by Franchisor from time to time in accordance with System Standards. Franchisor may require Franchisee to purchase or lease any products from Franchisor's designee, Required Vendors, Approved Vendors, and under Franchisor's specifications. Franchisor may periodically change any such requirement or change the status of any vendor. Any such requirement or change by Franchisor shall be made effective by insertion into the Manual, System Standards or otherwise by written notice to Franchisee.
- 8.2 Alternate Vendor Approval. If Franchisor requires Franchisee to purchase a particular product or service only from an Approved Vendor or Required Vendor, and Franchisee desires to purchase the product or service from a different vendor, then Franchisee shall submit a written request to Franchisor for approval and any information, specifications and/or samples requested by Franchisor. Franchisor may condition its approval on such criteria as Franchisor deems appropriate, which may include evaluations of the vendor's capacity, quality, financial stability, reputation, and reliability; inspections; product testing, and performance reviews.
Source: Item 23 — RECEIPTS (FDD pages 39–125)
What This Means (2024 FDD)
According to the 2024 Endless Summer Sweets Franchise Disclosure Document, the franchisor exerts considerable control over the franchisee's business operations. Endless Summer Sweets grants the franchisee the right to operate a business solely at an approved location and requires the franchisee to develop and operate the business for the entire term of the agreement. The franchisee must also get approval from Endless Summer Sweets before making any public statements related to the business or associating with any causes in the name of the business.
Endless Summer Sweets also restricts the franchisee from engaging in any business activity at the location other than the operation of the Endless Summer Sweets business. The franchisee is prohibited from using business assets for purposes other than the business itself. If the franchisee is an entity, that entity cannot own or operate any other business except for Endless Summer Sweets businesses. Additionally, the franchisee cannot engage a third-party management company to manage the business without prior written approval from Endless Summer Sweets.
The franchisee is obligated to identify itself as an independent owner of the business in a manner prescribed by Endless Summer Sweets and must display signage identifying the location as an independently owned franchise. The franchisee must also adhere to honest and fair business practices in all interactions and comply with any code of ethics or statement of values from Endless Summer Sweets. Furthermore, the franchisee is prohibited from taking any action that may injure the goodwill associated with the Endless Summer Sweets marks.
Upon termination or expiration of the franchise agreement, the franchisee must pay all amounts owed to Endless Summer Sweets, return all copies of the manual and confidential information, and cease doing business under any of the Endless Summer Sweets marks. The franchisee is also required to de-identify the location so that it no longer contains the marks, signage, or any trade dress of an Endless Summer Sweets business. These stipulations demonstrate the significant control that Endless Summer Sweets maintains over its franchisees, both during and after the term of the franchise agreement.