Can Bombs Away Franchising establish and license Bombs Away businesses outside of a franchisee's territory?
Bombs_Away Franchise · 2024 FDDAnswer from 2024 FDD Document
- (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
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 retains the right to establish and license others to establish and operate Bombs Away businesses outside a franchisee's designated territory. This means that while franchisees are granted a specific territory to operate within, Bombs Away maintains the ability to expand its brand presence beyond those territories by opening corporate-owned locations or franchising to new operators in different areas.
This provision allows Bombs Away to grow its overall network and brand recognition without being restricted by the boundaries of existing franchise territories. For a prospective franchisee, this implies that while they have certain protections within their territory, Bombs Away can still develop the brand elsewhere, potentially impacting overall brand awareness and marketing efforts.
However, Bombs Away also has the right to serve (or authorize other franchisees to serve) customers in a franchisee's territory if the franchisee is in default or incapable of meeting customer demand. Bombs Away Franchising can also 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. Bombs Away Franchising can also 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. This could be a risk if the franchisee is not performing well or if Bombs Away sees an opportunity to better serve customers in that area.
Furthermore, Bombs Away Franchising may set policies binding on all franchisees regarding soliciting, marketing, and serving customers in another franchisee's territory, and Bombs Away Franchising may waive or modify such policies in any circumstance as Bombs Away Franchising determines. If a Bombs Away franchisee obtains a customer in the protected territory of another franchisee, then Bombs Away Franchising may in its discretion (i) require Franchisee to transfer the customer to such other franchisee, (ii) require Franchisee to pay such other franchisee 75% of the Gross Sales received from such customer, or (iii) fashion such other remedy as Bombs Away Franchising deems appropriate.