How is the fee for serving customers outside the Bombs Away franchisee's territory calculated?
Bombs_Away Franchise · 2024 FDDAnswer from 2024 FDD Document
primarily targeted inside the Territory and which incidentally reach potential customers outside of the Territory.
- (b) Service. Franchisee shall not serve customers outside of the Territory without Bombs Away Franchising's prior written permission. Bombs Away Franchising may withdraw permission at any time. If Franchisee serves a customer outside of the Territory without Bombs Away Franchising's prior written permission, Bombs Away Franchising may impose a fee equal to the greater of (i) $500 or (ii) 75% of the amount paid by such customer to Franchisee. This fee is a reasonable estimate of Bombs Away Franchising's internal cost of personnel time attributable to addressing Franchisee's breach of this Section, and it is not a penalty or estimate of all damages aris
Source: Item 22 — CONTRACTS (FDD pages 35–36)
What This Means (2024 FDD)
According to Bombs Away's 2024 Franchise Disclosure Document, franchisees are generally restricted from soliciting or serving customers outside of their designated territory. However, a franchisee may serve customers outside their territory if they obtain prior written permission from Bombs Away Franchising, which Bombs Away can withdraw at any time.
If a Bombs Away franchisee serves a customer outside of their territory without the required prior written permission, Bombs Away Franchising may impose a fee. This fee is calculated as the greater of $500 or 75% of the amount the customer paid to the franchisee for the service.
Bombs Away Franchising states that this fee is designed to cover the internal personnel costs associated with addressing the franchisee's breach of the agreement and is not considered a penalty or a comprehensive estimate of all potential damages resulting from the breach. This fee is in addition to any other legal rights or remedies Bombs Away Franchising may pursue.