Is the Bombs Away territory granted to the franchisee exclusive?
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. Bombs Away Franchising may set policies binding on all franchisees regarding referral fees (and other terms and conditions) when a customer is referred from one Bombs Away business to another. Bombs Away Franchising may waive or modify such policies in any circumstance as Bombs Away Franchising determines.
- 2.3 Franchisee Control. Franchisee represents that it will identify each owner, officer and director of Franchisee, and describes the nature and extent of each owner's interest in Franchisee.
Source: Item 12 — TERRITORY (FDD pages 23–24)
What This Means (2024 FDD)
According to Bombs Away's 2024 Franchise Disclosure Document, the franchise agreement grants franchisees 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. However, this exclusivity is subject to certain exceptions. Bombs Away retains the right to serve customers in the franchisee's territory, or authorize other franchisees to do so, if the franchisee is in default or unable to meet customer demand. Bombs Away can also serve a specific customer if the franchisee fails to properly serve them.
Bombs Away also reserves the right to use other distribution channels, such as the internet, to make sales within the franchisee's territory, provided that the products or services offered through these channels are different from those offered by the franchisee and use different trademarks. The franchise agreement does not prohibit Bombs Away from operating or franchising a business under a different trademark that sells similar goods or services.
Franchisees are restricted from soliciting or marketing to potential customers outside their territory, except for marketing efforts primarily targeted within their territory that may incidentally reach customers outside it. Serving customers outside the territory requires prior written permission from Bombs Away, which can be withdrawn at any time. 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 deemed appropriate by Bombs Away. These stipulations are important for prospective franchisees to consider, as they define the boundaries of their operational rights and the potential for competition within their designated area.