Can the Baya Bar franchisor's acquired or affiliated businesses operate within the developer's Development Area?
Baya_Bar Franchise · 2024 FDDAnswer from 2024 FDD Document
Notwithstanding the provisions of Section 2.1 above, Developer understands and agrees Franchisor fully reserves all other rights, other than as specified in this Agreement, for sales, solicitation and distribution of Baya Bar products and services within or outside of the Development Area.
This reservation of Franchisor's rights includes, but is not limited to, Franchisor's right to the rights to offer (i) other products or services not offered under the Marks, (ii) other food or beverage concepts under the Marks or other trademarks, and (iii) products or services through any channel in the Development Area other than a dedicated Baya Bar café such as distribution through retail outlets, including but not limited to, grocery stores; in captive market locations, such as airports and malls; and the Internet.
Source: Item 23 — RECEIPTS (FDD pages 56–189)
What This Means (2024 FDD)
According to the 2024 Baya Bar Franchise Disclosure Document, the franchisor retains specific rights within the Development Area, even after granting development rights to a developer. Specifically, Baya Bar reserves the right to offer other products or services not offered under the Baya Bar marks, other food or beverage concepts under the Baya Bar marks or other trademarks, and products or services through any channel other than a dedicated Baya Bar café. These alternative channels can include distribution through retail outlets like grocery stores, captive market locations such as airports and malls, and the Internet.
This reservation of rights means that while a developer is granted the right to develop, construct, open, and operate Baya Bar outlets within a specific Development Area, Baya Bar itself (or its affiliates) can still engage in various other business activities within that same area. This could include selling Baya Bar-branded products in grocery stores or operating entirely different food and beverage concepts under different trademarks.
For a prospective Baya Bar developer, this is a crucial consideration. While they are granted a specific territory for developing traditional Baya Bar cafes, they will not have exclusive rights to all acai or smoothie-related sales within that area. Baya Bar could potentially introduce competing products or alternative distribution channels that could impact the developer's potential revenue. It is important for a prospective developer to fully understand the implications of these reserved rights and how they might affect their business before signing the Development Agreement.