Will a Beauty Bungalows franchisee receive compensation for sales made by Beauty Bungalows through alternative distribution channels within the franchisee's Protected Territory?
Beauty_Bungalows Franchise · 2025 FDDAnswer from 2025 FDD Document
We and our affiliates may sell products under the Marks within and outside your Protected Territory through any method of distribution other than a dedicated Beauty Bungalows location, including, sales through such channels of distribution as the Internet, catalog sales, telemarketing, or other direct marketing sales (together, "alternative distribution channels"). You may not use alternative distribution channels to make sales outside or inside your Protected Territory except as described in the following paragraph and you will receive no compensation for our sales through alternative distribution channels except as described in the following paragraph.
We and our affiliates can use alternative distribution channels to make sales within your Protected Territory of products or services under trademarks different from the Marks you will use under the Franchise Agreement.
Source: Item 12 — TERRITORY (FDD pages 30–32)
What This Means (2025 FDD)
According to Beauty Bungalows's 2025 Franchise Disclosure Document, a franchisee will generally not receive compensation for sales made through alternative distribution channels within their protected territory. Beauty Bungalows retains the right to sell products under its trademarks through various methods outside of dedicated locations, such as internet sales, catalogs, telemarketing, and other direct marketing approaches. These are termed "alternative distribution channels."
Specifically, the FDD states that franchisees are not entitled to compensation for Beauty Bungalows' sales through these alternative channels, with limited exceptions. Beauty Bungalows and its affiliates can also use alternative distribution channels to sell products or services within a franchisee's protected territory under different trademarks than those used by the franchisee.
This policy means that a Beauty Bungalows franchisee could face competition from the franchisor's own sales efforts within their territory without receiving any direct benefit from those sales. The franchisee's protected territory offers exclusivity against other brick-and-mortar Beauty Bungalows locations but does not protect against online sales or other alternative distribution methods employed by the franchisor. This is a common practice in franchising, as franchisors often seek to maximize their reach through diverse sales channels, but it's crucial for franchisees to understand that their protected territory has these limitations.