How does Face Foundrie's Item 8 restrictions on suppliers relate to the franchisee's obligations detailed in Item 9?
Face_Foundrie Franchise · 2025 FDDAnswer from 2025 FDD Document
| Obligation | Section or Exhibit in | Section or Exhibit in | Disclosure | |
|---|---|---|---|---|
| Franchise Agreement | Development Agreement | Document Item | ||
| b. Pre-opening purchases/leases | Sections 4.01 and 9.02 | 3.2 and 3.3 | Items 7 and 8 | |
| c. Site development and other | Sections 3 and 9.02 | 3 | Items 6, 7, 8 and 11 | |
| pre-opening requirements | ||||
| g. Compliance with standards and policies/Operating Manuals | Sections 3, 4.06, 9.01, 9.07, 10.04, 10.05 | Not Applicable | Items 8, 11, 13, 14 and 16 | |
| l. Ongoing product/service | Section 9 | Not Applicable | Item 8 | |
| purchases |
9.02 Purchases and Approved Suppliers.
- (a) Franchisee shall purchase (or lease) all equipment, machinery, vehicles, fixtures, furnishings, signs, décor, beauty and facial, eyebrow, and eyelash products and supplies, back bar and retail products, packaging, furnishings, uniforms, technology, and other products, supplies or services required for the establishment and operation of the Facial Bar from suppliers designated or approved in writing by Franchisor (as used in this Section 9 the term "supplier" shall include manufacturers, distributors and other forms of suppliers).
Franchisor may designate at any time and for any reason, a single or multiple supplier(s) for equipment, machinery, vehicles, fixtures, furnishings, signs, décor, beauty and facial, eyebrow, and eyelash products and supplies, back bar and retail products, packaging, furnishings, uniforms, technology, and other products, supplies or services and require Franchisee to purchase exclusively from such designated supplier or suppliers, which exclusive designated supplier(s) may be Franchisor or an Affiliate of Franchisor.
If Franchisor designates itself as a supplier, Franchisor has the right to earn a profit on any items it supplies.
Franchisor and its Affiliates may receive payments, discounts or other consideration from suppliers in consideration of such suppliers' dealings with Franchisee and/or the System, and may use all amounts received by it without restriction.
Franchisor is not required to give Franchisee an accounting of supplier payments or to share the benefit of supplier payments with Franchisee or other System franchisees.
- (b) If Franchisee desires to purchase any equipment, machinery, vehicles, fixtures, furnishings, signs, décor, beauty and facial, eyebrow, and eyelash products and supplies, back bar and retail products, packaging, furnishings, uniforms, technology, and other products, supplies or services from suppliers other than those previously approved by Franchisor and such items have not been designated by Franchisor to be exclusively supplied by a designated supplier(s), Franchisee shall first submit to Franchisor a written request for authorization to purchase such items, together with such information and samples as Franchisor may require.
Upon receipt of written notice of such revocation, Franchisee shall cease to sell or use any disapproved item, Products and/or cease to purchase from any disapproved supplier.
9.04 Computer System and Required Software. The following terms and conditions shall apply with respect to the Computer System and Required Software:
- (c) Franchisee shall make, from time to time, such upgrades and other changes to the Computer System and Required Software as Franchisor may request in writing, and Franchisor may periodically require Franchisee, at its expense, to upgrade or update the Computer System and Required Software to remain in compliance with the standards, specifications and requirements required by Franchisor (collectively, "Computer Upgrades").
As of the date of this Disclosure Document, we estimate that required purchases and leases of goods, services, supplies, fixtures, equipment and inventory from designated or approved suppliers represent approximately 80% to 90% of your total cost of establishing, and approximately 85% to 95% of your total cost of operating your Facial Bar.
What This Means (2025 FDD)
According to Face Foundrie's 2025 Franchise Disclosure Document, Item 8, 'Restrictions on Sources of Products and Services,' directly impacts a franchisee's obligations as outlined in Item 9, 'Franchisee's Obligations.' Item 9 details various responsibilities, including pre-opening purchases/leases, site development, compliance with standards, and ongoing product/service purchases, all of which are linked to Item 8. This means Face Foundrie franchisees are obligated to adhere to the supplier restrictions when fulfilling these responsibilities.
Specifically, franchisees must purchase or lease equipment, products, and supplies from suppliers that Face Foundrie designates or approves. Face Foundrie can designate single or multiple exclusive suppliers, including themselves or an affiliate, and can profit from these arrangements. The FDD estimates that 80% to 90% of the total cost of establishing a Facial Bar, and 85% to 95% of the operating costs, are subject to these restrictions. If a franchisee wishes to use a non-approved supplier, they must seek written authorization from Face Foundrie.
These restrictions ensure brand consistency and quality control across all Face Foundrie locations. However, they also limit a franchisee's autonomy in sourcing products and potentially increase costs if Face Foundrie's approved suppliers are more expensive than alternatives. Franchisees are obligated to comply with these restrictions as part of their agreement, and failure to do so could result in a breach of contract. Face Foundrie also has the right to specify the computer systems and software that franchisees must use.
Face Foundrie can revoke supplier approval, and the franchisee must then cease purchasing from that supplier. The franchisee is also obligated to make upgrades and changes to the computer system and required software as requested by Face Foundrie. Prospective franchisees should carefully consider these obligations and restrictions, evaluating the potential impact on their operational costs and flexibility.