Does the Franchise Agreement for Baya Bar specify a designated territory?

According to Baya Bar's 2024 Franchise Disclosure Document, the Franchise Agreement may specify a designated territory. If the Baya Bar shop is in a suburban market, the designated territory will be a three-mile radius around the shop. For urban markets, the designated territory will include 50,000 residents. However, if the location is a Non-Traditional Site, there will be no designated territory. The FDD specifies that a Baya Bar franchise will not receive an exclusive territory and may face competition from other franchisees, company-owned outlets, other distribution channels, or competitive brands.

Even with a designated territory, Baya Bar retains significant rights. They can operate or franchise other Baya Bar shops at Non-Traditional Sites within the designated territory, without including those sites in the franchisee's territory. Baya Bar and its affiliates can also operate or franchise shops outside the designated territory during the franchise term, and even inside the territory after the agreement expires or terminates. They can also operate or franchise any type of shop other than a Baya Bar shop at any location, during or after the franchise term.

Baya Bar and its affiliates can sell products under the brand's marks within and outside the designated territory through alternative distribution channels like the internet, catalogs, grocery stores, and telemarketing. Franchisees are prohibited from using these alternative channels and will not receive compensation for sales made through them, even if the orders originate from or are delivered within their designated territory. The franchisor also retains the right to modify the designated territory when granting a successor Franchise Agreement, based on demographic changes, to maintain similar target demographics to the original territory. This re-evaluation could result in a smaller or larger territory for the franchisee.

For franchisees entering into a Multi-Unit Development Agreement (MUDA), Baya Bar grants the right to develop and operate a specified number of shops within a defined Development Area, according to a Minimum Performance Schedule. This Development Area is typically defined by municipal or county boundaries, but its actual size depends on factors like market availability, the franchisee's resources, the number of committed shops, population, and market conditions. However, even under a MUDA, the territory is not exclusive, and Baya Bar retains rights to operate or franchise shops at Non-Traditional Sites within the Development Area. Franchisees must meet the Minimum Performance Schedule to maintain their rights under the MUDA, and these rights expire once the last shop is opened, subject to territorial rights under individual franchise agreements and a right of first refusal for additional shops.