Can All States M.E.D. franchisees solicit orders from consumers outside of their territory?
All_States_M_E_D Franchise · 2024 FDDAnswer from 2024 FDD Document
incur in selling the item (e.g., credit card fees and shipping costs).
You and other franchisees may not solicit (but may accept) orders from consumers outside of your territory, including through the use of other channels of distribution, such as the Internet, catalog sales, telemarketing, or other direct marketing, but you may engage in internet and social media marketing pursuant to our guidelines which such marketing may extend outside your territory. We also reserve the right to implement cross-territorial protocols and other guidelines applicable to such situations as group advertising buys by multiple franchisees which may extend into multiple territories, solicitation of orders of individuals who may reside in one territory, yet work in another, and other cross-territorial situations. You agree to abide by any such cross-territorial protocols.
Neither we nor an affiliate operates, franchises, or has plans to operate or franchise a business under a different trademark which such business sells or will sell goods or services similar to those you will offer, but we reserve the right to do so.
Area Developers:
Under the Area Development Agreement (the "ADA"), you will develop, open and operate multiple outlets within a defined Development Area (the "Development Area"). We determine the Development Area using the same criteria that we use in deciding the Territory for a Business.
Source: Item 12 — TERRITORY (FDD pages 27–29)
What This Means (2024 FDD)
According to All States M.E.D.'s 2024 Franchise Disclosure Document, franchisees are generally restricted from actively seeking business outside their designated territory. Specifically, All States M.E.D. franchisees "may not solicit (but may accept) orders from consumers outside of your territory, including through the use of other channels of distribution, such as the Internet, catalog sales, telemarketing, or other direct marketing". This means that while an All States M.E.D. franchisee cannot directly target customers in other territories through active solicitation methods, they are allowed to fulfill orders that originate from outside their territory if a customer initiates the contact.
However, All States M.E.D. franchisees are permitted to engage in internet and social media marketing, even if such marketing extends beyond their territory, provided they adhere to All States M.E.D.'s guidelines. This allows for some level of broader market presence. All States M.E.D. also reserves the right to implement cross-territorial protocols to address situations like group advertising buys or orders from individuals who live in one territory but work in another. Franchisees must comply with these protocols.
All States M.E.D. also outlines that they will use reasonable efforts to compensate franchisees for internet sales made through their website, www.allstatesmed.com. If a purchase originates from an address within a franchisee's territory, the franchisee will receive the gross revenues from the sale, less deductions for the royalty fee, All States M.E.D.'s cost for the item, and any other costs incurred in the sale, such as credit card fees and shipping costs. This compensation structure aims to balance the benefits of online sales with the territorial rights granted to franchisees.
This policy is fairly typical in franchising, as franchisors often need to balance the need for franchisees to focus on their local market with the realities of e-commerce and broader marketing strategies. Prospective All States M.E.D. franchisees should carefully review the guidelines for internet and social media marketing and any cross-territorial protocols to fully understand the scope of their marketing activities and potential compensation for online sales originating from their territory.