What is the definition of 'Minimum Sales Quota' for a 1 800 Packouts franchise?
1_800_Packouts Franchise · 2025 FDDAnswer from 2025 FDD Document
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- (e) We and our affiliates have the right to operate, or grant others the right to operate, businesses or outlets in Your Territory offering dissimilar products or services under trademarks or service marks other than the Marks.
E. MINIMUM SALES QUOTA
After you have completed your second year of operations under your Franchise Agreement, each Agreement Year will be reviewed, retrospectively (i.e., at your third anniversary of operations, the performance occurring during the entire second Agreement Year will be reviewed), and your Franchised Business must achieve a minimum amount of Gross Sales equal to $1 per person in Your Territory (the "Minimum Sales Quota"). Each "Agreement Year" shall begin on the anniversary of the Agreement Date and end the day before the anniversary of the Agreement Date. The initial population of Your Territory is specified in Appendix A. If our population data provider provides us with revised population data, we will provide you with notice of the revised population of Your Territory, which will be used to determine the Minimum Sales Quota for the next Agreement Year. If you fail to achieve the Minimum Sales Quota in any Agreement Year, we may (i) enter into
Source: Item 23 — RECEIPT (FDD pages 67–238)
What This Means (2025 FDD)
According to the 2025 FDD, 1 800 Packouts defines the 'Minimum Sales Quota' as a minimum amount of Gross Sales equal to $1 per person in the franchisee's territory. This quota is assessed retrospectively each year, starting after the franchisee's second year of operation. The 'Agreement Year' begins on the anniversary of the agreement date and ends the day before the next anniversary. The initial population of the territory is specified in Appendix A of the Franchise Agreement.
1 800 Packouts may revise the population data used to determine the Minimum Sales Quota based on updates from their data provider. Franchisees will receive notice of any revised population data, which will then be used to calculate the Minimum Sales Quota for the subsequent Agreement Year. This ensures that the sales quota remains aligned with the current market potential in the franchisee's territory.
If a 1 800 Packouts franchisee fails to meet the Minimum Sales Quota in any Agreement Year, 1 800 Packouts has several options. They may offer assistance, planning, and consulting services to help the franchisee improve their performance. Alternatively, 1 800 Packouts may temporarily or permanently reduce the size of the franchisee's territory, or temporarily or permanently suspend the franchisee's exclusive rights within that territory. This highlights the importance of meeting the Minimum Sales Quota to maintain the full benefits of the franchise agreement.