Can Monicals Pizza terminate a franchise agreement if purchases are made from unapproved suppliers?
Monicals_Pizza Franchise · 2025 FDDAnswer from 2025 FDD Document
You must purchase your furniture, fixtures, equipment, including computer equipment, inventory and signage as specified in the Monical's Pizza Confidential Operations Manual ("Confidential Operations Manual"). These specifications include standards and specifications for appearance, quality, price, performance and functionality. These standards and specifications are based on our experience in operating businesses of the type we are franchising and through research and testing in our businesses. We may communicate our standards and specifications directly to suppliers who wish to supply you with furniture, fixtures, equipment, inventory and signage under specifications. We communicate our standards and specifications to you when we evaluate your proposed location for the franchised restaurant, during training, before you conduct your grand opening advertising, during on-site opening assistance, during periodic visits to your franchise location and through the Confidential Operations Manual (including periodic bulletins). We will periodically issue new standards and specifications (if any) through written notices. While we have created standards and specifications for the development of your franchised restaurant, we have not designated any vendors and suppliers. No officer of the franchisor has any ownership or other interest in any supplier.
If you would like to use any goods or services in establishing and operating the franchised restaurant that we have not approved (for goods and services that must meet our standards, specifications or that require supplier approval), you must first send us sufficient information, specifications and samples for us to determine whether the goods or services comply with our standards and specifications or the supplier meets our approved supplier criteria. You must pay our expenses to evaluate goods, services or suppliers. We will decide within a reasonable time (usually 30 days) after receiving the required information whether you may purchase or lease the goods or services or use a particular supplier. Our criteria for approving or revoking approval of suppliers includes: the supplier's ability to provide sufficient quantity of goods; quality of goods or services at competitive prices; production and delivery capability; and dependability and general reputation.
Source: Item 16 — RESTRICTIONS ON WHAT THE FRANCHISEE MAY SELL (FDD page 32)
What This Means (2025 FDD)
According to Monicals Pizza's 2025 Franchise Disclosure Document, franchisees must purchase furniture, fixtures, equipment (including computer equipment), inventory, and signage as specified in the Monical's Pizza Confidential Operations Manual. These specifications include standards for appearance, quality, price, performance, and functionality, based on Monicals Pizza's experience and research. Monicals Pizza communicates these standards during location evaluation, training, before the grand opening, during on-site assistance, periodic visits, and through the Confidential Operations Manual, issuing new standards via written notices. While Monicals Pizza has created standards and specifications, they have not designated any specific vendors or suppliers.
If a franchisee wants to use goods or services not already approved by Monicals Pizza, they must submit sufficient information, specifications, and samples for evaluation. The franchisee is responsible for covering the expenses of this evaluation. Monicals Pizza will then decide within a reasonable time (usually 30 days) whether to approve the purchase or lease of the goods or services, or the use of a particular supplier.
The criteria for approving or revoking supplier approval include the supplier's ability to provide sufficient quantities of goods, the quality of goods or services at competitive prices, production and delivery capability, and overall dependability and reputation. While the FDD outlines the process for requesting approval of new suppliers and the criteria Monicals Pizza uses for evaluation, it does not explicitly state that purchasing from unapproved suppliers is grounds for termination of the franchise agreement.
Therefore, a prospective franchisee should ask Monicals Pizza for clarification on whether purchasing from unapproved suppliers would be a breach of the franchise agreement that could lead to termination. It would also be prudent to understand the specific remedies Monicals Pizza might pursue in such a case, and whether there are any exceptions or mitigating circumstances.