Can Beauty Bungalows use different trademarks within a franchisee's Protected Territory?

According to Beauty Bungalows' 2025 Franchise Disclosure Document, Beauty Bungalows and its affiliates have the right to use, license, and franchise the use of trademarks or service marks that are not the same or similar to the franchisee's marks. This allowance extends to alternative channels of distribution or any location, including within the franchisee's Protected Territory. These operations can be the same as, similar to, or different from Beauty Bungalows Franchises.

This means that a Beauty Bungalows franchisee could face competition within their Protected Territory from Beauty Bungalows itself or other entities using different trademarks. These competitive operations could offer similar or different services, potentially impacting the franchisee's market share and revenue. The FDD specifies that Beauty Bungalows reserves the right to operate or offer products and services through alternative channels of distribution in the Protected Territory, which could intensify competition.

This is a significant consideration for potential franchisees. While they are granted a Protected Territory, the franchisor retains considerable freedom to operate other businesses, even those with similar offerings, under different brands within that same territory. Prospective franchisees should carefully evaluate the potential impact of such competition on their business and consider this factor when assessing the overall viability of the franchise opportunity. It is important to understand the extent to which Beauty Bungalows might leverage this right and how it could affect the franchisee's business.

It is common for franchise agreements to include clauses that allow the franchisor to engage in activities that might compete with the franchisee to some extent. However, the breadth of Beauty Bungalows's reserved rights, including the use of different trademarks within the Protected Territory, is something a potential franchisee should carefully consider and discuss with the franchisor to fully understand the implications.