Under what conditions does the Better Blend franchise agreement prevent the franchisor from establishing a company-owned outlet within the franchisee's exclusive territory?
Better_Blend Franchise · 2024 FDDAnswer from 2024 FDD Document
- 2.2 Protected Territory. BBF shall not establish, nor license the establishment of, another business within the Territory (other than a Limited Access Venue) selling the same or similar goods or services under the same or similar trademarks or service marks as a Better Blend business. This prohibition does not apply to any Better Blend business operating or under construction when the Territory is determined. BBF and its affiliates retain the right to do any of the following (all without any compensation to Franchisee):
- (i) establish and license others to establish and operate Better Blend businesses outside the Territory, notwithstanding their proximity to the Territory or their potential impact on the Business;
- (ii) establish and license others to establish and operate Better Blend businesses in Limited Access Venues inside the Territory;
- (iii) operate and license others to operate businesses anywhere, including within the Territory, that sell the same or similar goods or services as a Better Blend business under trademarks or service marks that are not the same as or similar to the Marks;
(iv) sell and license others to sell any products and services in the Territory under any trademarks or service marks (including the Marks) through channels of distribution (including the internet) other than Better Blend;
(iv) acquire or be acquired by (under any form of business transaction) a Competitor that has (or may in the future have) outlets in the Territory which compete with the Business under trademarks or service marks other than the Marks; and
(v) engage in any action not specifically precluded by the express terms of this Agreement.
Source: Item 22 — CONTRACTS (FDD page 43)
What This Means (2024 FDD)
According to Better Blend's 2024 Franchise Disclosure Document, the franchise agreement grants the franchisee the right to operate a Better Blend business at a specific location. Better Blend agrees not to establish or license another business within the franchisee's territory that sells similar goods or services under the same trademarks. This protection applies only to businesses operating under the Better Blend name or similar branding.
However, this restriction does not apply to Better Blend businesses already operating or under construction when the territory is determined. Better Blend retains the right to establish or license Better Blend businesses outside the franchisee's territory, even if they are nearby or impact the franchisee's business. They can also establish or license businesses in Limited Access Venues within the franchisee's territory.
Furthermore, Better Blend can operate or license businesses anywhere, including within the franchisee's territory, that sell similar goods or services under different trademarks. They can also sell and license others to sell any products and services in the territory through different channels of distribution, including the internet, under any trademarks. Better Blend also retains the right to acquire or be acquired by a competitor, even if that competitor has outlets in the franchisee's territory.