What are the conditions that could affect a Bath Tune Up franchisee's operations in a Gray Area?
Bath_Tune_Up Franchise · 2025 FDDAnswer from 2025 FDD Document
Gray Area are subject to sale of the territory to another franchisee, to initiation of "company-owned" operations in the Gray Area, and to Franchisor's rules and regulations, including that any advertising in Gray Area can only include Franchisor's toll-free telephone number, and not the local telephone number of Franchisee.
Franchisee does not receive any right of first refusal or other rights of any type to a Gray Area by virtue of operations in that Gray Area. Franchisor may sell any Gray Area territory at any time, without advance notice to Franchisee. Upon notice from Franchisor, Franchisee will immediately cease all marketing activities in any Gray Area. Franchisor may give a notice to cease marketing without regard to whether the Gray Area has been sold to another franchisee. After Franchisor gives notice to cease marketing, Franchisee may (for a maximum of 30 days) complete installations of Bath Improvements for which orders were completed before Franchisor gave Franchisee notice to cease marketing in the area.
| 3. LOCATION OF BUSINESS |
|---|
| Principal Place of Business |
| Franchisee's principal place of business is at the following location: |
3.2. Office/Warehouse
Unless the Franchised Business will be operated from the Franchisee's residence, Franchisee will secure an office and/or warehouse in the Territory at which (among other things) Franchisee shall accept delivery of Products before installation.
**3.3.
Source: Item 16 — RESTRICTION ON WHAT FRANCHISEE MAY SELL (FDD pages 37–38)
What This Means (2025 FDD)
According to Bath Tune Up's 2025 Franchise Disclosure Document, a "Gray Area" is defined as an area adjoining the Territory that is not part of any other franchisee's territory, nor an area served by a Company-Owned Operation. A Bath Tune Up franchisee's operations in a Gray Area are subject to specific conditions.
First, Bath Tune Up retains the right to sell or assign a Gray Area, or any part of it, at any time, without providing any prior notice to the franchisee operating in that area. The franchisee does not have any right of first refusal or option to purchase a territory that was previously designated as a Gray Area. This means that Bath Tune Up can decide to transfer the Gray Area to another franchisee or entity without the original franchisee's consent or input.
Second, upon receiving notice from Bath Tune Up, the franchisee must immediately cease all marketing activities within the Gray Area. This cessation of marketing can be enforced regardless of whether the Gray Area has been sold to another franchisee. However, the franchisee is allowed a maximum of 30 days after the notice to complete installations of Bath Improvements for which orders were finalized before the notice was given. This provision allows for a transition period to fulfill existing obligations but strictly prohibits further marketing efforts.
Finally, to operate in a Gray Area, a franchisee must obtain prior written approval from Bath Tune Up before selling Bath Improvements for installation in that area. While Bath Tune Up generally grants permission to operate in Gray Areas, this consent is required, and the Bath Improvements sold must be installed in buildings located either within the franchisee's Territory or, with Bath Tune Up's consent, in the Gray Area. This condition ensures that Bath Tune Up maintains control over the expansion and service areas of its franchisees, preventing unauthorized encroachment into potentially valuable territories.