Can a Baya Bar franchisee face competition from outlets that the franchisor owns?

According to Baya Bar's 2024 Franchise Disclosure Document, franchisees may face competition from outlets that Baya Bar owns. Specifically, Baya Bar states that franchisees will not receive an exclusive territory and "may face competition from other franchisees, from outlets that we own, or from other channels of distribution or competitive brands that we control." This means that Baya Bar retains the right to operate its own stores, which could be in direct competition with a franchisee's location.

This lack of an exclusive territory is a significant consideration for potential franchisees. While Baya Bar states that during the term of the Franchise Agreement, it will not establish or operate, nor license any other person to establish or operate, a Shop in the Designated Territory, there are exceptions. Baya Bar can establish Shops at Non-Traditional Sites within a franchisee's Designated Territory. These Non-Traditional Sites include locations such as gas stations, convenience stores, transportation facilities, military bases, sports facilities, amusement parks, educational facilities, hospitals, hotels, and casinos.

Furthermore, Baya Bar retains the right to sell products through alternative distribution channels, such as the internet, grocery stores, and club stores, both within and outside a franchisee's designated territory. Franchisees will not receive any compensation for sales made through these alternative channels, even if the customer is located within their territory. Baya Bar also has the right to develop other franchise systems for similar products and services using different trade names and trademarks, increasing the potential for competition. Prospective franchisees should carefully consider these competitive factors and evaluate the potential impact on their business before investing in a Baya Bar franchise.