Besides the limited exclusivity in paragraph (a), what other rights does Bath Tune Up expressly reserve?
Bath_Tune_Up Franchise · 2025 FDDAnswer from 2025 FDD Document
- (e) Except to the limited extent expressly provided in paragraph (a) of this section the rights granted to Franchisee under this Agreement are non-exclusive and Franchisor expressly reserves all other rights, including the exclusive, unrestricted rights, directly and indirectly, itself and through its employees, representatives, franchisees, licensees, assigns, agents, and others: (i) to own and operate, and to franchise others to own and operate, Bath Improvements businesses using the System and the Marks at any location outside the Territory, (ii) to solicit, sell to, and service Key Accounts and the clients of those Key Accounts, wherever located (including within the Territory), subject to compliance with paragraph (b) of this Section 2.2 and Section 8.16, (iii) to acquire or be acquired by a company that operates and/or franchises Bath Improvements businesses within the Territory without using the System and the Marks, (iv) to acquire or be acquired by a manufacturer of products associated with Bath Improvements activities, (v) to sell Bath Improvements services and products through any other means that do not involve both the System and the Marks (including within the Territory), and (vi) to advertise and promote the System and the Marks at any location within or outside the Territory.
Source: Item 22 — CONTRACTS (FDD page 52)
What This Means (2025 FDD)
According to Bath Tune Up's 2025 Franchise Disclosure Document, besides the limited exclusivity detailed in paragraph (a), Bath Tune Up retains significant rights regarding the operation of other Bath Improvement businesses, key accounts, acquisitions, sales, and advertising. Specifically, Bath Tune Up reserves the right to operate or franchise others to operate Bath Improvement businesses outside the franchisee's territory. They can also solicit, sell to, and service Key Accounts, including those within the franchisee's territory, provided they comply with specific sections of the agreement. Bath Tune Up can also engage in business activities with companies that operate or franchise Bath Improvement businesses within the franchisee's territory as long as they do not use Bath Tune Up's system and marks. They can also be acquired by a manufacturer of products associated with Bath Improvement activities.
Furthermore, Bath Tune Up reserves the right to sell Bath Improvement services and products through other means that do not involve both the Bath Tune Up system and marks, even within the franchisee's territory. They also retain the right to advertise and promote the Bath Tune Up system and marks at any location, whether inside or outside the franchisee's territory. These reserved rights allow Bath Tune Up to maintain control over its brand and expand its business through various channels, which may or may not directly benefit the franchisee.
For a prospective franchisee, this means that while you are granted a territory, Bath Tune Up retains considerable freedom to operate and expand its brand in ways that could potentially compete with your franchise. It is important to understand the implications of these reserved rights and how they might affect your business. For example, Bath Tune Up can pursue key accounts directly, even within your territory, which could impact your potential customer base. Additionally, their ability to sell services and products through alternative channels could create competition outside of the franchise system.
It is also important to note that Bath Tune Up can modify the Marks from time to time, and the franchisee will be responsible for implementing these changes at their own expense. Bath Tune Up also reserves the right to withhold consent for sub-licensing or transfers of the franchise agreement, and can impose conditions on such transfers. These stipulations underscore the importance of carefully reviewing the franchise agreement and understanding the full scope of Bath Tune Up's reserved rights and the franchisee's obligations.