How long does Red Wagon Club have to notify a franchisee of the approval or rejection of a proposed supplier?
Red_Wagon_Club Franchise · 2024 FDDAnswer from 2024 FDD Document
If you would like to purchase or use any products, services, supplies or materials from any unapproved supplier, you must submit to us a written request for approval of the proposed supplier before purchasing any such products, services, supplies or materials. Your request must include sufficient specifications and information about the proposed supplier. Our criteria for approving suppliers is confidential and not made available to franchisees. Under our current evaluation procedure, we will notify you in writing of the approval or rejection of the proposed supplier within 6 months of our receipt of all requested information. You must pay us any actual costs we incur in connection with our review of your request. If we fail to respond within 6 months, your request will be deemed denied. If we approve your request, we may later revoke our approval by notifying you in writing if the supplier does not continue to meet any of our criteria. You may not directly contract with any alternative supplier without our prior written approval.
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 19–22)
What This Means (2024 FDD)
According to Red Wagon Club's 2024 Franchise Disclosure Document, if a franchisee wants to purchase products, services, supplies, or materials from an unapproved supplier, they must submit a written request for approval to Red Wagon Club. This request must include sufficient specifications and information about the proposed supplier. Red Wagon Club will then notify the franchisee in writing of the approval or rejection of the proposed supplier within 6 months of receiving all the requested information.
If Red Wagon Club fails to respond within this 6-month timeframe, the request will be deemed denied. Even if Red Wagon Club approves a request, they may later revoke their approval by notifying the franchisee in writing if the supplier no longer meets their criteria. The franchisee is not allowed to directly contract with any alternative supplier without Red Wagon Club's prior written approval.
This means a prospective Red Wagon Club franchisee needs to be aware that seeking approval for alternative suppliers can be a lengthy process, potentially taking up to six months for a response. The franchisee also bears the cost of Red Wagon Club's review of the request. The risk exists that a request could be denied, either explicitly or through lack of response, or that an approval could be revoked later. This could limit the franchisee's options and potentially impact their costs and operations.