Does Bombs Away grant franchisees an exclusive 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. 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 Franchisee obtains a customer in the protected territory of another franchisee, then, in addition to all other rights and remedies Bombs Away Franchising may have, 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.
- (e) Referrals.
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 a protected territory. Bombs Away will not establish or license another business within the franchisee's territory that sells the same or similar goods or services under the Bombs Away brand. The franchisee is restricted from soliciting or marketing to potential customers outside of their territory, except for solicitations primarily targeted within the territory that may incidentally reach outside it. Serving customers outside the territory requires prior written permission from Bombs Away, which can be withdrawn at any time. Serving customers outside the territory without permission may result in a fee equal to the greater of $500 or 75% of the amount paid by the customer to the franchisee.
However, Bombs Away retains several rights that could impact the exclusivity of the territory. Bombs Away can serve customers (or authorize other franchisees to do so) within the franchisee's territory if the franchisee is in default or unable to meet customer demand. They can also serve a specific customer if the franchisee fails to serve them properly or if Bombs Away believes the franchisee will not do so. Bombs Away also retains the right to establish and license Bombs Away businesses outside the territory.
Furthermore, Bombs Away can operate and license businesses anywhere that do not operate under the Bombs Away brand name, and sell/license others to sell Bombs Away products/services through other distribution channels (including the internet) as long as these products/services are not provided through a Bombs Away outlet in the territory and are different from those the franchisee offers. Bombs Away may also set policies regarding soliciting, marketing, and serving customers in another franchisee's territory, and may waive or modify these policies as they determine. If a franchisee obtains a customer in another franchisee's protected territory, Bombs Away may require the franchisee to transfer the customer, pay the other franchisee 75% of the gross sales from that customer, or implement another remedy they deem appropriate. These stipulations and exceptions are important for prospective franchisees to consider, as they define the practical limitations of the protected territory.