Legal Tools
Are Franchisees Required
to Use Designated
Suppliers of Franchisors?
by Julie Lusthaus Franchisors have the right to designate what products and services franchisees must use in the operation of their businesses. This ensures they meet the franchisor’s standards and the suppliers have been properly vetted. While franchisees can be required to use certain suppliers, franchisors must
14 The Franchise Woman
provide information about mandated suppliers in Item 8 of the Franchise Disclosure Document. In Item 8, franchisors must “[d] isclose the franchisee’s obligations to purchase or lease goods, services, supplies, fixtures, equipment,
inventory, computer hardware and software, real estate, or comparable items related to establishing or operating the franchised business either from the franchisor, its designee, or suppliers approved by the franchisor, or under the franchisor’s specifications.”
