What is the condition for 1 800 Packouts to not be in violation of the paragraph regarding company-owned locations?

According to the 2025 1 800 Packouts Franchise Disclosure Document, 1 800 Packouts will not be in violation of paragraph 4 regarding company-owned locations if rights or licenses existed before the date of the addendum that permit a franchisee to conduct activities that 1 800 Packouts would otherwise have to curtail. However, 1 800 Packouts agrees not to renew such rights or licenses when they expire or are terminated. This condition protects franchisees by preventing 1 800 Packouts from opening company-owned locations within their territory, provided the franchisee remains in good standing and is not in default under the Franchise Agreement.

This clause is significant for prospective franchisees as it outlines the circumstances under which 1 800 Packouts can operate company-owned locations within a franchisee's territory. The exception applies only to pre-existing rights or licenses, ensuring that 1 800 Packouts cannot create new company-owned locations that would compete with the franchisee. The commitment not to renew these pre-existing rights or licenses further solidifies the protection offered to franchisees.

This type of territorial protection is common in franchising, but the specific details can vary significantly. Franchisees should carefully review the terms of the Franchise Agreement and any related addenda to fully understand the scope of their territorial rights and any exceptions that may apply. Understanding these conditions is crucial for assessing the potential for competition within the assigned territory and the overall value of the franchise opportunity.