Can Bombs Away establish a company-owned outlet in a franchisee's exclusive territory?
Bombs_Away Franchise · 2024 FDDAnswer from 2024 FDD Document
onal franchises.
Exclusivity
We grant you an exclusive territory. In your territory, we will not establish either a company-owned or franchised outlet selling the same or similar goods or services under the same or similar trademarks or service marks as a Bombs Away outlet. Continuation of your territorial
exclusivity does not depend on any contingency. There are no circumstances that permit us to modify your territorial rights.
Restrictions on Us from Soliciting or Accepting Orders in Your Territory
Except as described in this paragraph, we will not serve customers in your territory, nor authorize another party to serve customers in your territory, under our Bombs Away brand. However, we may serve (or authorize other franchisees to serve) customers in your territory if you are in default, or if you are incapable of meeting customer demand in your territory. We may also serve (or authorize another franchisee to serve) a particular customer in your territory if you fail to properly serve such customer, or if we reasonably believe that you will not properly serve such customer. We reserve the right to use other channels of distribution, such as the internet, catalog sales, telemarketing, or other direct marketing sales, to make sales within your territory (i) using our principal trademarks, but only for sales of products or services different from the ones you will offer, and (ii) using trademarks different from the ones you will use. In the circumstances where the franchise agreement does not prohibit us from soliciting or accepting orders from inside your territory, we do not pay any compensation to you.
Source: Item 12 — TERRITORY (FDD pages 23–24)
What This Means (2024 FDD)
According to Bombs Away's 2024 Franchise Disclosure Document, franchisees are granted an exclusive territory. Bombs Away states that within this territory, they will not establish a company-owned outlet that offers the same or similar goods or services under the same or similar trademarks as a Bombs Away outlet. The continuation of this exclusivity does not depend on any specific conditions, and Bombs Away states that there are no circumstances that would permit them to modify these territorial rights.
However, Bombs Away retains certain rights within a franchisee's territory. Bombs Away may serve customers or authorize other franchisees to do so if the franchisee is in default or is unable to meet customer demand in the territory. Additionally, Bombs Away may serve a specific customer or authorize another franchisee to do so if the franchisee fails to properly serve that customer or if Bombs Away reasonably believes that the franchisee will not properly serve the customer.
Bombs Away also reserves the right to use other channels of distribution, such as the internet, catalog sales, telemarketing, or other direct marketing sales, to make sales within the franchisee's territory. This is allowed (i) using Bombs Away's principal trademarks, but only for sales of products or services different from the ones the franchisee will offer, and (ii) using trademarks different from the ones the franchisee will use. Bombs Away will not pay any compensation to the franchisee for sales made within the territory under these circumstances.