Does the Buns On Fire Franchise Agreement grant franchisees any territorial rights?
Buns_On_Fire Franchise · 2025 FDDAnswer from 2025 FDD Document
regardless of whether the Gift Card was issued by you or another franchisee.
ITEM 12: TERRITORY
You will not receive an exclusive territory. You may face competition from other franchisees, from outlets that we own, or from other channels of distribution or competitive brands that we control. The Franchise Agreement does not grant you any territorial rights beyond whatever geographic area identified in an exhibit to the Franchise Agreement. There will, however, be protected geographical territory ("Protected Territory"). The Protected Territory, as designated in Exhibit A to the Franchise Agreement, will be an area up to five (5) miles surrounding the restaurant determined by shortest driving distance using Google Maps or a similar mapping program. Except for Non-Traditional Sites as defined below and in Article 1.4 of the Franchise Agreement, Franchisor agrees not to establish another Franchised Business within the Franchisee's Protected Territory. The Protected Territory will be a substantially smaller area around the Franchise Business if it is located in an urban or highly populated setting. For locations in urban or highly populated areas the Protected Territory may be an area of only several blocks around the location approved for the Franchise Business, and for locations in suburban areas the Territory may be up to a two-mile area surrounding the restaurant, also determined by shortest driving distance using Google Maps or a similar mapping program. In all cases the Protected Territory will be set forth in the Franchise Agreement. During the term of the Franchise Agreement we will not, without your consent, establish or franchise another to establish a franchise within your Protected Territory under the Franchise Agreement except for the right to operate and to grant others the right to operate restaurants at "Non-Traditional Sites" (as defined in the Franchise Agreement) under any terms and conditions the Franchisor deems appropriate, regardless of proximity to the Franchise Business as provided in the Franchise Agreement. The designation of your Protected Territory does not mean that other Franchised Business may not solicit, market or advertise to customers within your Protected Territory. It solely means the Franchisor agrees not to establish Franchised Business within the Protected Territory. The relocation of any Franchise Business will be subject to our prior written approval, which may be withheld on whatever basis we determine is in our best interests. If we approve relocation of the Franchise Business, its new location must not be in the Protected Territory of another Franchised Business.
The Protected Territory granted to you is not dependent upon the achievement of a certain sales volume, market penetration or other contingency. There are no circumstances under which the protected area granted to you may be altered before the expiration or termination of the Franchise Agreement, without our mutual consent.
Except as expressly limited by the terms of your Franchise Agreement, we and our affiliates retain all rights with respect to franchised businesses, the Proprietary Marks, and any goods and services outside of your Protected Territory, including: (a) to produce, offer and sell and to grant others the right to produce, offer and sell the services and/or goods offered at the Franchise Business and any other goods and services through similar or dissimilar channels of distribution under trade and service marks other than the Proprietary Marks and under any terms; (b) the right to operate or grant others the right to operate a Buns on Fire franchise anywhere regardless of its proximity to your Franchise Business and on terms we deem appropriate; (c) to operate and to grant others the right to operate Buns on Fire Restaurants at Non-Traditional Sites anywhere under any terms and conditions we deem appropriate; and (d) the right to acquire and operate a business operating one or more restaurants and/or other food service businesses located or operated anywhere.
Source: Item 12 — TERRITORY (FDD pages 33–35)
What This Means (2025 FDD)
According to the 2025 Buns On Fire Franchise Disclosure Document, franchisees do not receive an exclusive territory but are granted a protected geographical territory. This Protected Territory is defined in Exhibit A of the Franchise Agreement and extends up to five miles surrounding the restaurant, determined by the shortest driving distance using Google Maps or a similar mapping program. However, for locations in urban or highly populated settings, the Protected Territory may be smaller, potentially only several blocks around the approved location, while suburban areas may have up to a two-mile protected area. The specific dimensions of the Protected Territory will be detailed in the Franchise Agreement.
Buns On Fire agrees not to establish another franchised business within the franchisee's Protected Territory, with the exception of Non-Traditional Sites, which Buns On Fire can operate or grant others the right to operate regardless of proximity to the franchisee's location. The designation of a Protected Territory does not prevent other franchisees from soliciting, marketing, or advertising to customers within that territory; it only restricts Buns On Fire from establishing another franchised business there.
Buns On Fire and its affiliates retain the right to sell products under the Proprietary Marks both within and outside the franchisee's Protected Territory through various Alternative Distribution Channels, such as the Internet, catalog sales, telemarketing, retail stores, and grocery stores. Franchisees are prohibited from using these Alternative Distribution Channels to make sales either inside or outside their Protected Territory, and they may face competition from these channels within their territory. Franchisees also cannot engage in promotional activities or sell products through the Internet, catalogs, or other electronic means to customers outside their Protected Territory, nor can they sell proprietary products for resale.