Does the Gross Revenues definition for Apricot Lane authorize sales other than over-the-counter sales?
Apricot_Lane Franchise · 2025 FDDAnswer from 2025 FDD Document
r party hereby agree as follows:
SECTION 1: GRANT, LOCATION AND INITIAL FRANCHISE FEE
A. Grant
FRANCHISOR hereby grants to FRANCHISEE, upon the terms and conditions herein contained, the right, franchise and privilege (the "franchise") to use the Mark "APRICOT LANE" as provided hereinafter (the "Designated Mark") and such other Marks as FRANCHISOR may authorize from time to time in the operation of a Specialty Store at a single approved location as provided in Section 1.B below. If a location for the Specialty Stores has not been selected and approved on signing this Agreement, the Designated Mark will be inserted in this Section 1.A no later than when a location is selected and approved as provided under the "Open License" terms and in Section 1.B below. The grant is limited to the right to operate a Specialty Store under the Designated Mark at the location designated in Section 1.B for retail over-the-counter sales to consumers of approved merchandise and services as hereinafter provided and any sales by the Franchised Business through any other means such as at wholesale, by mail order, through catalogs, electronic commerce, any other distribution channel, or at fairs or trade shows is prohibited without the express prior written consent of FRANCHISOR. If FRANCHISOR approves such sales, FRANCHISEE's sales shall comply with all conditions set forth in such consent.
B. Location
| The Franchised Business will be located within the Territory described in Section 2.A of this Agreement.
Source: Item 23 — RECEIPTS (FDD pages 51–222)
What This Means (2025 FDD)
According to Apricot Lane's 2025 Franchise Disclosure Document, the franchise agreement primarily grants the right to operate a retail store for over-the-counter sales. However, it also addresses sales through other means. Specifically, the document states that sales through channels like wholesale, mail order, catalogs, electronic commerce, or at fairs and trade shows are prohibited without the franchisor's express prior written consent. If Apricot Lane approves such sales, the franchisee must comply with all conditions set forth in that consent.
This means that while the primary focus is on traditional retail sales, there is a possibility to expand into other sales channels with the franchisor's approval. This provides some flexibility for franchisees to adapt to changing market conditions or explore new revenue streams. However, it also introduces a layer of dependence on the franchisor's decisions, as any deviation from over-the-counter sales requires their explicit permission.
Furthermore, the FDD states that even unauthorized sales through other means are included in the calculation of Gross Revenues. This implies that Apricot Lane will still collect royalties on any sales made, regardless of whether they were pre-approved. This could be a point of concern for franchisees, as they would be obligated to pay royalties on sales channels that were not explicitly authorized. A prospective franchisee should seek clarification on what constitutes 'unauthorized' sales and the potential consequences of engaging in such sales activities without prior approval.
In summary, while Apricot Lane's franchise is primarily geared towards over-the-counter retail sales, the agreement does acknowledge the possibility of other sales channels with franchisor approval. Franchisees need to be aware of the restrictions and conditions surrounding these alternative sales methods and ensure they obtain proper authorization to avoid potential conflicts or penalties.