Under what circumstances does Bath Tune Up charge an encroachment payment?
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, an encroachment payment is charged if a franchisee violates their franchise agreement by making sales in another franchisee's exclusive territory. This payment is equal to 100% of the gross sales made in the other franchisee's territory.
This encroachment payment serves as an alternative to the termination of the franchise agreement. Instead of terminating the agreement, Bath Tune Up may allow the franchisee to continue operating, provided they pay the encroachment fee. This provides an opportunity for the franchisee to rectify the situation without losing their franchise entirely.
For a prospective Bath Tune Up franchisee, it is crucial to understand the defined territory and adhere strictly to it. Operating outside the designated territory can result in a significant financial penalty, potentially eliminating any profit from those sales. Franchisees should ensure they have a clear understanding of their territory boundaries and avoid any actions that could be construed as encroachment.