Can Bombs Away Franchising establish another business within the franchisee's territory?
Bombs_Away Franchise · 2024 FDDAnswer from 2024 FDD Document
ng 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);
- (ii) serve (or authorize other franchisees to serve) a particular customer in the Territory if Franchisee fails to properly serve such customer, or if Bombs Away Franchising reasonably believes that Franchisee will not properly serve such customer;
- (iii) establish and license others to establish and operate Bombs Away businesses outside the Territory;
- (iv) operate and license others to operate businesses anywhere that do not operate under the Bombs Away brand name; and
- (v) sell and license others to sell Bombs Away products and services to customers in the Territory through channels of distribution (including the internet) so long as
such products and services are not provided through a Bombs Away outlet in the Territory, and are different from the products and services provided by Franchisee.
- (d) Policies.
Source: Item 22 — CONTRACTS (FDD pages 35–36)
What This Means (2024 FDD)
According to Bombs Away's 2024 Franchise Disclosure Document, Bombs Away Franchising generally will not establish or license another business within a franchisee's territory that offers the same or similar goods or services under the Bombs Away brand. This provision aims to protect the franchisee's market area from direct competition from the franchisor or other franchisees.
However, Bombs Away Franchising retains several important exceptions to this exclusivity. Bombs Away Franchising can serve customers in the franchisee's territory if the franchisee is in default or is unable to meet customer demand. They can also serve a specific customer if the franchisee fails to properly serve that customer or if Bombs Away Franchising believes the franchisee will not do so. Additionally, Bombs Away Franchising can establish and license Bombs Away businesses outside the franchisee's territory.
Furthermore, Bombs Away Franchising reserves the right to operate and license businesses anywhere that do not operate under the Bombs Away brand name. They can also sell and license others to sell Bombs Away products and services through other distribution channels, including the internet, as long as these products and services are not provided through a Bombs Away outlet in the territory and are different from those the franchisee provides. These exceptions mean that while Bombs Away franchisees have some territorial protection, Bombs Away Franchising retains considerable flexibility to operate and license other businesses that may compete to some extent with the franchisee.