Does Fitstop have to make its supplier approval criteria available to franchisees?
Fitstop Franchise · 2024 FDDAnswer from 2024 FDD Document
We will notify you in writing within 90 days after we receive all necessary information and/or complete our inspection or testing to advise you if we approve or disapprove the proposed service, item and/or supplier. If you do not receive a notification from us within that 90-day period, the proposed service, item and/or supplier is deemed disapproved. The criteria we use in approving or rejecting new suppliers is proprietary, but we may (but are not required to) make it available to you upon request. Each supplier that we approve of must comply with our usual and customary requirements regarding insurance, indemnification and non-disclosure. If we approve any supplier, we will not guarantee the performance of any supply contract with that supplier under any circumstances. We may re-inspect and/or revoke our approval of a supplier or service or item at any time and for any reason to protect the best interests and goodwill of our System and Proprietary Marks. The revocation of a previously approved product, service or alternative supplier is effective immediately when you receive written notice from us of revocation and, following receipt of our notice, you may not place any new orders for the revoked product, or with the revoked supplier or offer the revoked service.
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 19–23)
What This Means (2024 FDD)
According to Fitstop's 2024 Franchise Disclosure Document, the criteria Fitstop uses for approving or rejecting new suppliers is considered proprietary. However, Fitstop may, but is not required to, make this criteria available to franchisees upon request. This means that while Fitstop is not obligated to disclose the specific standards they use to evaluate potential suppliers, a franchisee can ask to review them.
This policy has implications for a prospective Fitstop franchisee who may want to suggest an alternative supplier. While Fitstop retains control over supplier selection to maintain brand consistency and quality, the possibility of accessing the approval criteria provides a degree of transparency. Knowing these criteria could help a franchisee identify suppliers that meet Fitstop's standards, increasing the likelihood that their proposed supplier will be approved.
It is important to note that even if Fitstop provides the approval criteria, they are not obligated to approve a franchisee's proposed supplier. Fitstop maintains the right to make the final decision to protect the best interests and goodwill of the Fitstop system. Additionally, any approved supplier must comply with Fitstop's requirements regarding insurance, indemnification, and non-disclosure.