Are there risks associated with operating a Bens Soft Pretzels franchise?
Bens_Soft_Pretzels Franchise · 2025 FDDAnswer from 2025 FDD Document
We and our affiliates retain all rights that are not expressly granted to you under this Agreement. Further, we and our affiliates may, among other things, on any terms and conditions we deem advisable, without compensation to any franchisee, and without granting you any rights therein:
- (i) establish and/or license others to establish franchised or company-owned or affiliate-owned Stores at any location, regardless of the proximity of such stores to your Designated Area;
- (ii) merge with, acquire or become associated with ("Merger/Acquisition Activity") any businesses or stores of any kind (including those in competition with BEN'S SOFT PRETZELS) under other systems and/or marks, which businesses and stores may convert to or operate under the Trademarks and may offer or sell menu items, products and services that are the same as or similar to the Menu Items offered at or from the Store, and which may be located anywhere; and
- (iii) sell and distribute for ourselves and/or license others to sell and distribute through franchised businesses or any other method of distribution menu items the same as or different from the Menu Items offered under the System, and which are offered and distributed under marks different than the Trademarks.
We and our affiliates also have the right to offer, sell or distribute any proprietary items or other products or services associated with the System (now or in the future) or identified by the Trademarks, or any other trademarks, service marks or trade names through any distribution channels or methods, without compensation to any franchisee. The distribution channels or methods ("Alternative Methods of Distribution") include, without limitation, grocery stores, club stores, convenience stores, wholesale, business or industry locations (e.g. manufacturing site, office building), military installations, military commissaries or the Internet (or any other existing or future form of electronic commerce).
Source: Item 22 — CONTRACTS (FDD pages 46–47)
What This Means (2025 FDD)
According to the 2025 Bens Soft Pretzels Franchise Disclosure Document, there are several risks associated with operating a franchise. Bens Soft Pretzels retains significant rights that could impact a franchisee's business. Specifically, Bens Soft Pretzels has the right to establish or license others to establish franchised, company-owned, or affiliate-owned stores at any location, regardless of proximity to a franchisee's designated area. This means that Bens Soft Pretzels could open another store right next to an existing franchise, potentially drawing away customers and reducing revenue.
Additionally, Bens Soft Pretzels can merge with, acquire, or become associated with other businesses, including competitors. These businesses could then operate under Bens Soft Pretzels' trademarks and offer similar menu items, products, and services, which could further intensify competition for franchisees. Bens Soft Pretzels also has the right to sell and distribute menu items through other channels, such as grocery stores or online, without compensating the franchisee. These alternative methods of distribution could divert sales away from traditional franchise locations.
These provisions in the franchise agreement highlight the importance of carefully considering the potential for competition and market saturation when investing in a Bens Soft Pretzels franchise. A prospective franchisee should evaluate the designated area and assess the likelihood of new stores or alternative distribution channels impacting their business. It would be prudent to discuss these risks with existing franchisees and seek clarification from Bens Soft Pretzels regarding their plans for future expansion and alternative distribution methods.