What is the purpose of Schedule 1, the Protected Territory Acknowledgement, for a Beauty Bungalows franchise?
Beauty_Bungalows Franchise · 2025 FDDAnswer from 2025 FDD Document
1.20 "Protected Territory" means the territory described in Schedule 1 to Appendix A to this Agreement, subject to any reservations or exceptions contained in this Agreement.
4.02 Protected Territory.
Once you have selected and we have accepted a Premises in the Site Selectin Area, we will designate an area within the confines of your Site Selection Area as your Protected Territory.
During the term of this Agreement and any extensions, neither Franchisor nor any affiliate will operate, or grant others the right to open and operate, a Beauty Bungalows location using the Marks within your Protected Territory, but Franchisor, its affiliates, and its franchisees have the right to do so anywhere outside your Protected Territory as designated in Appendix A to this Agreement.
Once established, the boundaries of Franchisee's Protected Territory will not be adjusted during the Term without the written consent of both parties hereto.
- 4.03 Solicitation.
Franchisee will have the right to solicit potential Customers within the Protected Territory.
Franchisee may not knowingly, directly or indirectly, solicit or endeavor in any way to entice or lure customers of another Beauty Bungalows franchisee except, however, the general solicitation of potential Customers through direct mail and social media advertising, when intended as a general solicitation across large, multiple geographic areas, is not a violation of this provision.
- 4.04 Reservation of Rights.
Franchisor reserves the rights, among others:
Source: Item 22 — CONTRACTS (FDD pages 47–48)
What This Means (2025 FDD)
According to Beauty Bungalows's 2025 Franchise Disclosure Document, Schedule 1, the Protected Territory Acknowledgement, serves to define the franchisee's protected territory. The franchise agreement specifies in Section 1.20 that the "Protected Territory" is described in Schedule 1 to Appendix A of the agreement, subject to any reservations or exceptions contained within the agreement. This territory is a defined area within the franchisee's Site Selection Area, as detailed in Appendix A.
Once Beauty Bungalows accepts the franchisee's chosen premises within the Site Selection Area, they will designate a Protected Territory. During the term of the agreement, Beauty Bungalows will not operate or allow others to operate a Beauty Bungalows location using their trademarks within this Protected Territory. However, Beauty Bungalows, its affiliates, and its franchisees retain the right to operate outside the franchisee's Protected Territory, as designated in Appendix A. The boundaries of the Protected Territory will not be altered during the term of the agreement without the written consent of both parties.
The franchisee has the right to solicit potential customers within their Protected Territory. However, they are restricted from knowingly soliciting customers of other Beauty Bungalows franchisees, with the exception of general solicitations through direct mail and social media advertising that target large geographic areas. Beauty Bungalows also retains specific rights, including the right to operate Beauty Bungalows businesses outside the Protected Territory, sell goods or services through alternative channels, and implement multi-area marketing programs.
In practical terms, Schedule 1 provides a Beauty Bungalows franchisee with a defined area where they have some protection from direct competition from other Beauty Bungalows locations. However, it's important to note the exceptions and reservations, such as Beauty Bungalows's right to use alternative distribution channels and conduct internet marketing, which could still impact the franchisee's business within their Protected Territory. A prospective franchisee should carefully review Schedule 1 and Appendix A to fully understand the scope and limitations of their Protected Territory.