Under what conditions can a Bath Tune Up franchisee operate in a Gray Area?
Bath_Tune_Up Franchise · 2025 FDDAnswer from 2025 FDD Document
in the Territory, (ii) develop, to the best of its ability, the potential for the Franchised Business from within the Territory, (iii) operate the Franchised Business so as to maximize the Gross Revenue of the Franchised Business, and (iv) devote and focus its full-time attention and efforts to that promotion and development.
Unless otherwise instructed by Franchisor, Franchisee may operate in Gray Area. Any operations in 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'
Source: Item 22 — CONTRACTS (FDD page 52)
What This Means (2025 FDD)
According to Bath Tune Up's 2025 Franchise Disclosure Document, a franchisee may operate in a Gray Area unless otherwise instructed by Bath Tune Up. A "Gray Area" is defined as an area adjoining the franchisee's territory that is not part of any other franchisee's territory or an area served by a company-owned operation.
However, this right to operate in a Gray Area is subject to certain conditions. Bath Tune Up can sell the Gray Area to another franchisee or initiate company-owned operations in that area. If either of these events occurs, the franchisee must cease all marketing activities in the Gray Area upon notice from Bath Tune Up. The franchisee is allowed a maximum of 30 days after the notice to complete installations for which orders were completed before the notice was given.
Furthermore, any advertising in a Gray Area can only include Bath Tune Up's toll-free telephone number and not the local telephone number of the franchisee. Gross revenue from work performed in a Gray Area is included when calculating the franchisee's monthly Gross Revenue, which is used to determine the National Advertising Fee. The franchisee must pay the greater of 1% of the franchisee's monthly Gross Revenue for the previous month or $500 as a National Advertising Fee. Bath Tune Up may increase this amount but not above 2% of the franchisee's monthly Gross Revenue.