What is the geographic scope of the non-compete agreement for Bath Tune Up franchisees during the term of the agreement?
Bath_Tune_Up Franchise · 2025 FDDAnswer from 2025 FDD Document
tary information in connection with any other businesses or services without the express prior written permission of the President or other executive officer of Franchisor, which permission, if granted, will bring the other businesses or services within the scope of the Franchised Business.
2.2. Limited Exclusivity
- (a) Except as provided in paragraphs (b), (c), (d) and (e) of this section, during the Term, Franchisor will not establish or operate within the Territory, or franchise any third party to establish or operate within the Territory, any other Bath Improvements business using the System and the Marks.
- (b) Franchisee may not contract with Key Accounts. Franchisee agrees that, from time to time, Franchisor may enter into agreements with Key Accounts that contemplate performance in multiple territories, including the Territory, of sales and/or installations of Bath Improvements. If Franchisee wishes to service Key Accounts in the Territory as Franchisor's subcontractor, it shall sign Franchisor's then-
current Master Services Agreement which shall govern all work performed by Franchisee for Key Accounts. Franchisee may choose whether to service any particular Key Account on a case by case basis. If Franchisee chooses to opt out with respect to any Key Account in the Territory, or if Franchisee fails to provide sales, installations, or other services to a particular Key Account in the Territory on any two occasions in a 12-month period, Franchisor may provide or grant others the right to provide sales, installations, or other services with respect to that particular Key Account in the Territory for the remainder of the term.
A customer in the Territory with a job that is too large for Franchisee to undertake or that Franchisee chooses not to service shall be deemed to be a Key Account for purposes of this Section 2.2(b) even if that Key Account is limited to the Territory.
- (c) Franchisee acknowledges that, from time to time, opportunities may arise to participate in joint marketing efforts with other BATH TUNE-UP® franchisees. If Franchisee is afforded the opportunity to participate in joint marketing efforts but declines to do so, the participating BATH TUNE-UP® franchisee must offer any leads for the Territory generated as a result of the joint marketing effort to Franchisee on reasonable terms and conditions (including maximum lead fees per referral) specified from time to time in the Manuals. If the participating franchisee complies with Franchisor's guidelines on the offering terms for the leads and Franchisee declines to accept the lead on the terms offered, then the participating franchisee will not be required to turn over the lead to Franchisee and the participating franchisee may instead work the lead in the Territory without compensation to Franchisee.
- (d) Franchisee agrees that if, as a result of Franchisee's default of this Agreement and as an alternative to termination, Franchisor withholds customer leads generated on Franchisee's behalf by Franchisor as described in sections 8.11(e) and 10.6 of this Agreement, Franchisor may provide or grant other franchisees the right to provide sales, installations or other services with respect to those customer leads in the Territory until Franchisee cures the breach.
Source: Item 22 — CONTRACTS (FDD page 52)
What This Means (2025 FDD)
According to Bath Tune Up's 2025 Franchise Disclosure Document, during the term of the franchise agreement, the franchisor agrees not to establish or operate, nor franchise any third party to establish or operate, any other bath improvement business using the Bath Tune Up system and marks within the franchisee's territory. This grants the franchisee a limited exclusivity within their designated territory, subject to certain exceptions.
However, this exclusivity is not absolute. Bath Tune Up franchisees may not contract with Key Accounts, as the franchisor may enter into agreements with Key Accounts that involve performance across multiple territories, including the franchisee's territory. If a franchisee wishes to service Key Accounts in their territory, they must sign the franchisor's Master Services Agreement. The franchisee has the option to decline servicing a Key Account, but if they opt out or fail to provide services to a Key Account on two occasions within a 12-month period, Bath Tune Up may grant others the right to service that Key Account in the territory.
Furthermore, a customer within the franchisee's territory with a job too large for the franchisee or that the franchisee chooses not to service is considered a Key Account. Franchisees are also expected to refer customers from other franchisees' territories to the appropriate franchisee, without compensation, to protect the goodwill of the Bath Tune Up brand. This ensures that franchisees avoid making sales in other territories and prevent misunderstandings regarding product pricing.