Does Bath Tune Up grant exclusive rights to the franchisee under 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.
Source: Item 22 — CONTRACTS (FDD page 52)
What This Means (2025 FDD)
According to the 2025 Bath Tune Up Franchise Disclosure Document, the franchise agreement grants limited exclusivity to the franchisee. Bath Tune Up will not establish or operate another Bath Improvements business using their system and marks within the franchisee's territory, nor will they franchise any third party to do so during the term of the agreement. However, this exclusivity is subject to several exceptions.
One significant exception involves "Key Accounts." Bath Tune Up retains the right to enter into agreements with Key Accounts that may involve performance within the franchisee's territory. If a franchisee wishes to service these Key Accounts as a subcontractor, they must sign Bath Tune Up's Master Services Agreement. The franchisee can choose whether or not to service a Key Account on a case-by-case basis. However, if the franchisee opts out of servicing a Key Account or fails to provide services to a Key Account on two occasions within a 12-month period, Bath Tune Up reserves the right to grant others the right to service that specific Key Account within the franchisee's territory for the remainder of the agreement term.
Furthermore, Bath Tune Up reserves several rights, including the right to operate and franchise others outside the franchisee's territory, solicit and sell to Key Accounts regardless of location, and sell Bath Improvements services and products through other means that do not involve both the System and the Marks. These reserved rights and exceptions significantly limit the franchisee's exclusivity, meaning that while Bath Tune Up provides some territorial protection, franchisees may face competition from the franchisor itself or other franchisees in certain circumstances.