What is the purpose of the encroachment payment for Bath Tune Up?
Bath_Tune_Up Franchise · 2025 FDDAnswer from 2025 FDD Document
| TYPE OF FEE 1 | AMOUNT | DUE DATE | REMARKS |
|---|---|---|---|
| Encroachment Payment | 100% of your gross sales in another franchisee’s territory. | When you make sales in another franchisee's territory in violation of your franchise agreement. | As an alternative to termination of your franchise for operating in another franchisee's territory. |
Source: Item 6 — OTHER FEES (FDD pages 15–19)
What This Means (2025 FDD)
According to Bath Tune Up's 2025 Franchise Disclosure Document, the encroachment payment serves as an alternative to the termination of the franchise agreement if a franchisee operates in another franchisee's exclusive territory. If a Bath Tune Up franchisee violates the terms of their agreement by making sales within another franchisee's territory, they will be required to pay 100% of the gross sales earned in that other franchisee's territory as an encroachment payment.
This payment is due when the unauthorized sales occur. Instead of Bath Tune Up terminating the franchise agreement for this violation, the encroachment payment allows the franchisee to continue operating, provided they compensate the affected franchisee for the sales made in their territory.
This policy is designed to protect the territorial rights of each Bath Tune Up franchisee and ensure that franchisees respect each other's market areas. It also provides Bath Tune Up with a mechanism to address territorial violations without resorting to immediate termination, offering a potential middle ground for resolving disputes.