Is a Bombs Away franchisee allowed to solicit customers outside of their territory?
Bombs_Away Franchise · 2024 FDDAnswer from 2024 FDD Document
erate a Bombs Away business in the Territory for the entire term of this Agreement.
2.2 Protected Territory.
- (a) Limitation. Franchisee shall not solicit or market to potential customers outside of the Territory, except for solicitations or marketing which are 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 arising from Franchisee's breach. This fee is in addition to all of Bombs Away Franchising's other rights and remedies.
- (c) Exclusivity. Bombs Away Franchising shall not establish, nor license the establishment of, another business within the Territory or which serves customers located in the Territory selling the same or similar goods or services under the same or similar trademarks or service marks as a Bombs Away business. However, Bombs Away Franchising retains the right to:
- (i) serve (or authorize other franchisees to serve) customers in the Territory if Franchisee is in default, or if Franchisee is incapable of meeting customer demand in the Territory (in Bombs Away Franchising's reasonable opinion);
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 marketing to potential customers outside of their designated territory. However, there is an exception for solicitations or marketing efforts primarily targeted within the territory that may incidentally reach customers outside of it.
Serving customers outside the territory requires prior written permission from Bombs Away Franchising, which can be withdrawn at any time. If a franchisee serves a customer outside their territory without this permission, Bombs Away Franchising may impose a fee. This fee is the greater of $500 or 75% of the amount the customer paid to the franchisee. This fee is considered a reasonable estimate of internal costs associated with addressing the breach and is in addition to any other remedies Bombs Away Franchising may pursue.
Bombs Away Franchising also retains the right to set policies regarding soliciting, marketing, and serving customers in another franchisee's territory, and may modify or waive these policies as they see fit. If a franchisee obtains a customer within another franchisee's protected territory, Bombs Away Franchising has the discretion to require the franchisee to transfer the customer, pay the other franchisee 75% of the gross sales received from that customer, or implement another remedy they deem appropriate. These stipulations are designed to protect each Bombs Away franchisee's territory and maintain brand consistency.