What is the geographic scope of the development rights granted to the Baya Bar developer?
Baya_Bar Franchise · 2024 FDDAnswer from 2024 FDD Document
2.1 Grant. Franchisor hereby grants to Developer, and the Developer hereby accepts from the Franchisor, on the terms and conditions set forth in this Agreement, which includes, but is not limited to, the execution of a Franchise Agreement pursuant to Section 4.1 hereof, the right to develop, construct, open and operate one (1) Baya Bar outlet within the Development Area set forth in Attachment 2.
Developer shall be granted rights to establish additional Baya Bar café outlets in the Development Area, up to the total number of outlets set forth in the Mandatory Development Schedule set forth in Section 5.2 hereof, subject to Developer's full compliance with all conditions precedent to the grant of such rights outlined below, which rights shall be exercised in accordance with Section 4.1 hereof.
- 2.2 Reservation of Rights.
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.
- 2.3 No License to System and Marks.
Developer expressly acknowledges that this Agreement is not a Franchise Agreement and does not grant to Developer any right or license to operate a Baya Bar outlet, distribute any product or service, or use the Marks.
This Agreement sets forth conditions which, if fully satisfied, confer upon Developer the rights to enter a Franchise Agreement with Franchisor to establish one or more Baya Bar outlets in the Development Area only.
Developer's rights to open and operate a Baya Bar outlet and use the System and Marks shall be derived only through the execution of a Franchise Agreement for each Baya Bar outlet to be established in the Development Area.
- **3.
TERM.** Unless sooner terminated in accordance with this Agreement, the term of this Agreement and all rights granted by Franchisor under this Agreement shall expire on the date on which Developer successfully and in a timely manner has complied with all of Developer's obligations hereunder and has completed the development obligations in accordance with the Development Schedule.
Source: Item 23 — RECEIPTS (FDD pages 56–189)
What This Means (2024 FDD)
According to Baya Bar's 2024 Franchise Disclosure Document, a developer is granted the right to develop, construct, open, and operate one Baya Bar outlet within a specific "Development Area." This area is detailed in Attachment 2 of the Development Agreement. The developer may be granted rights to establish additional Baya Bar café outlets within this Development Area, up to the total number of outlets specified in the Mandatory Development Schedule, provided they fully comply with all conditions.
Baya Bar retains all other rights for sales, solicitation, and distribution of Baya Bar products and services both within and outside the Development Area, except those specifically granted to the developer in the agreement. This reservation includes the right to offer other products or services not offered under the Baya Bar trademarks, other food or beverage concepts, and to distribute products through various channels such as retail outlets, grocery stores, captive market locations like airports and malls, and the Internet, rather than exclusively through the developer's Baya Bar café.
The Development Agreement itself does not grant the developer any right or license to operate a Baya Bar outlet, distribute any product or service, or use the Baya Bar Marks. These rights are only conferred upon the execution of a Franchise Agreement for each Baya Bar outlet to be established in the Development Area. The term of the Development Agreement lasts until the developer has successfully complied with all obligations and completed the development obligations according to the Development Schedule.
This means that while a Baya Bar developer gains exclusive rights to develop Baya Bar locations within a defined area, Baya Bar retains significant control over product distribution and brand usage. A prospective developer should carefully review Attachment 2 to understand the exact geographic scope of their development rights and consider Baya Bar's other distribution channels within that area.