Can Extreme Art Studio inspect a proposed supplier's facilities for an Extreme Art Studio franchise?
Extreme_Art_Studio Franchise · 2024 FDDAnswer from 2024 FDD Document
If you would like to purchase or use any products, services, operating assets, or materials that we have not approved or from any unapproved supplier, you must submit to us a written request for approval of the proposed product and/or supplier prior to purchasing any such item. We reserve the right to charge you our then-current new product/supplier application fee and require you to reimburse us for our expenses (which will not exceed the reasonable cost of the research and inspection, and the actual cost of the test) to make the evaluation. We have the right to inspect the proposed supplier's facilities, and to require product samples from the proposed supplier to be delivered at our option either directly to us or to a third party we designate for testing. We shall notify you in writing of the approval or rejection of the proposed supplier within a reasonable time after completion of the investigation of the proposed supplier. If we fail to respond within 60 days, your request will be deemed denied. We may withhold approval of the supplier. We are likely to reject your request for a new supplier without conducting any investigation if the proposed supplier is for items bearing our Marks, or if we already have designated an exclusive supplier for the item proposed to be offered by the new supplier. We reserve the right to periodically re-inspect the facilities and products of any approved supplier and to revoke our approval if the supplier does not continue to meet any of our criteria. We also reserve the right to charge suppliers a royalty for the right to manufacture products for use in Extreme Art Studio Businesses.
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 23–26)
What This Means (2024 FDD)
According to Extreme Art Studio's 2024 Franchise Disclosure Document, if a franchisee wants to use a product or supplier not already approved, they must seek approval from Extreme Art Studio. As part of this process, Extreme Art Studio reserves the right to inspect the proposed supplier's facilities. The franchisee may also be required to cover the costs of the inspection.
Extreme Art Studio may charge a new product/supplier application fee and require the franchisee to reimburse expenses related to the evaluation, which will not exceed the reasonable cost of the research and inspection, and the actual cost of the test. Extreme Art Studio can also request product samples to be sent directly to them or a third party for testing. The franchisee will be notified in writing of the approval or rejection of the proposed supplier within a reasonable time after the investigation. However, if Extreme Art Studio fails to respond within 60 days, the request is deemed denied.
Extreme Art Studio is likely to reject a request without investigation if the proposed supplier is for items bearing their marks or if they already have an exclusive supplier for the item. Even after approval, Extreme Art Studio reserves the right to periodically re-inspect the facilities and products of any approved supplier and revoke approval if the supplier no longer meets their criteria. They also reserve the right to charge suppliers a royalty for the right to manufacture products for use in Extreme Art Studio Businesses. This ensures that Extreme Art Studio maintains control over the quality and consistency of products used in its franchises.