What is the condition for 1 800 Packouts to not open a company-owned location in the territory?
1_800_Packouts Franchise · 2025 FDDAnswer from 2025 FDD Document
The Franchisor further agrees that for so long as Franchisee remains in good standing under the Franchise Agreement and is not in default, Franchisor will not open a company-owned location in the Territory. The Franchisor shall not be in violation of this paragraph 4 in the event that rights or licenses in existence prior to the date of this Addendum exist permitting a franchisee of Franchisor to
conduct activities that Franchisor would otherwise have obligations to curtail pursuant to paragraph 4, save that Franchisor agrees not to renew such rights or licenses at the time that they expire by their terms or are otherwise terminated.
Source: Item 12 — TERRITORY (FDD pages 40–43)
What This Means (2025 FDD)
According to 1 800 Packouts's 2025 Franchise Disclosure Document, the franchisor agrees not to open a company-owned location in the franchisee's territory as long as the franchisee remains in good standing under the Franchise Agreement and is not in default.
However, this obligation does not apply if rights or licenses existed before the addendum's date that permit another 1 800 Packouts franchisee to conduct activities within the territory that the franchisor would otherwise be obligated to curtail. In such cases, 1 800 Packouts agrees not to renew these pre-existing rights or licenses when they expire or are terminated.
This clause provides a degree of protection for the franchisee's territory against direct competition from company-owned locations, but it is subject to the franchisee's compliance with the Franchise Agreement and the existence of prior agreements with other franchisees.