Could a Beauty Bungalows franchisee face competition from Beauty Bungalows, its affiliates, other franchisees, or others inside and outside of their Protected Territory?
Beauty_Bungalows Franchise · 2025 FDDAnswer from 2025 FDD Document
The Protected Territory we grant you is an exclusive territory. However, because we reserve certain rights to operate or offer products and services through alternative channels of distribution in your Protected Territory, you may face competition from us, our affiliates, other franchisees, or others inside and outside of your Protected Territory.
We reserve the following rights, among others:
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- to own, franchise, or operate Beauty Bungalows Franchises at any location outside of the Protected Territory, regardless of the proximity to your Site;
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- to use the Marks and the System to sell any goods or services, including salon equipment or services, or beauty supplies similar to those which you will sell, through any alternative distribution channels within or outside of the Protected Territory. This includes, but is not limited to, other channels of distribution such as television, mail order, catalog sales, wholesale sale to unrelated franchises, or over the Internet. We exclusively reserve the Internet as a channel of distribution for us, and you may not independently market on the Internet or conduct e-commerce.
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- to purchase or be purchased by, or merge or combine with, any businesses, including a business that competes directly with your Beauty Bungalows Franchise, wherever located; and
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- to implement multi-area marketing programs which may allow us or others to solicit or sell to customers anywhere. We also reserve the right to issue mandatory policies to coordinate such multi-area marketing programs.
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- to use, license and franchise the use of trademarks or service marks that are not the same or similar to the Marks, whether in alternative channels of distribution or at any location including within the Protected Territory, in association with operations that are the same as, similar to, or different than Beauty Bungalows Franchises.
Source: Item 12 — TERRITORY (FDD pages 30–32)
What This Means (2025 FDD)
According to Beauty Bungalows's 2025 Franchise Disclosure Document, a franchisee may face competition from various sources, even within their Protected Territory. While Beauty Bungalows grants a Protected Territory, it retains the right to operate or offer products and services through alternative channels of distribution. These alternative channels include the Internet, catalog sales, telemarketing, and other direct marketing sales. Beauty Bungalows and its affiliates can also use these alternative distribution channels to sell products or services under different trademarks within a franchisee's Protected Territory. This means that even with a Protected Territory, a Beauty Bungalows franchisee could face competition from the franchisor itself, its affiliates, other franchisees, or other businesses operating inside or outside the territory.
Beauty Bungalows also reserves several rights that could impact a franchisee's competitive landscape. These include the right to own, franchise, or operate Beauty Bungalows franchises outside of the Protected Territory, regardless of proximity to the franchisee's site. They also reserve the right to use the Beauty Bungalows marks and system to sell goods or services through alternative distribution channels, such as television, mail order, catalog sales, wholesale sales, or the Internet, within or outside the Protected Territory. Notably, Beauty Bungalows exclusively reserves the Internet as a distribution channel and franchisees are not allowed to independently market or conduct e-commerce online.
Furthermore, Beauty Bungalows retains the right to purchase or merge with any business, even those that directly compete with a franchisee's Beauty Bungalows franchise, regardless of location. They can also implement multi-area marketing programs that allow them or others to solicit or sell to customers anywhere. Additionally, Beauty Bungalows can use, license, and franchise the use of trademarks or service marks that are not similar to the Beauty Bungalows marks, whether in alternative channels or at any location, including within the Protected Territory, for operations that are the same as, similar to, or different from Beauty Bungalows franchises. These retained rights highlight that while a franchisee receives a Protected Territory, Beauty Bungalows maintains significant flexibility to operate and compete within and around that territory.