For Bang Cookies, what is the definition of 'Designated Territory'?
Bang_Cookies Franchise · 2024 FDDAnswer from 2024 FDD Document
"Designated Territory" refers to and means the territory identified and described in Schedule 1 attached to and made a part of this Agreement or, if Schedule 1 is not completed at the time of signing this Agreement, as Schedule 1 is otherwise completed in accordance with this Agreement. Franchisor, in Franchisor's Reasonable Business Judgment and discretion, shall determine the Designated Territory. If Schedule 1 is not completed and/or is not signed by Franchisor there shall be no Designated Territory.
Source: Item 23 — RECEIPTS (FDD pages 56–245)
What This Means (2024 FDD)
According to Bang Cookies' 2024 Franchise Disclosure Document, a 'Designated Territory' is defined as the specific area outlined in Schedule 1 of the Franchise Agreement. This schedule should be attached to and form part of the agreement. However, if Schedule 1 is not completed when the agreement is signed, it will be completed later in accordance with the agreement. Bang Cookies retains the authority to determine the Designated Territory at its reasonable discretion. It's important to note that if Schedule 1 is not completed or signed by Bang Cookies, then no Designated Territory is granted to the franchisee.
This means that a franchisee's exclusive rights to operate and market their Bang Cookies shop are directly tied to the existence and definition of this Designated Territory. Without a clearly defined territory in Schedule 1, the franchisee may not have any territorial protection, and Bang Cookies could potentially establish other franchises nearby. This could significantly impact the franchisee's potential customer base and revenue.
Prospective franchisees should carefully review Schedule 1 of the Franchise Agreement to fully understand the boundaries of their Designated Territory. If the schedule is not completed at the time of signing, it is crucial to discuss with Bang Cookies how the territory will be determined and what factors will be considered. Franchisees should also be aware of the implications if Bang Cookies does not ultimately designate a territory, as this could leave them vulnerable to competition from other Bang Cookies shops. Furthermore, franchisees should understand that Bang Cookies may prohibit them from soliciting customers outside of their Designated Territory.