How does C3 Wellness Spa define 'Designated Territory' in the franchise agreement?
C3_Wellness_Spa Franchise · 2024 FDDAnswer from 2024 FDD Document
(8) Franchisor, in Franchisor's Reasonable Business Judgment and for any reason or no reason at all, may prohibit Franchisee from soliciting Spa customers located outside Franchisee's Designated Territory;
(9) Except as otherwise provided in this Agreement including, but not limited to, the Reserved Rights, provided that, at all times Franchisee is and remains in compliance with all of the terms and provisions of this Agreement, during the Term of this Agreement, neither Franchisor nor any affiliate of Franchisor will establish or operate, or grant a franchise to any third party to establish or operate, a Spa Location Franchise using the Licensed Marks and System at a Spa Location that is located within Franchisee's Designated Territory (provided that a Designated Territory has been designated and approved by Franchisor in accordance with the terms of this Agreement).
Notwithstanding the foregoing, Franchisee agrees that Franchisee may face competition from other C3 Wellness, Spa Location Franchises and other System franchisees with Spa locations and/or designated territories that are located adjacent to and/or within a close proximity to Franchisee's Spa Location and/or Designated Territory.
Franchisee agrees that although Franchisor may disapprove of any marketing medium that is distributed and/or reaches outside of Franchisee's Designated Territory, that Franchisor is not obligated to do so and that Franchisee may face competition from other Spas, Spa Location Franchises and System franchisees that market and promote their Spa(s) through internet, mail, public relations, and other marketing activities and mediums that are distributed to or within Franchisee's Designated Territory.
Franchisee agrees that
Franchisee shall not receive any compensation whatsoever if Franchisor or another System franchisee solicits customers from within Franchisee's Designated Territory; and
(10) The foregoing rights granted in this Article 2.A. are subject to and contingent upon each and every, term and condition of this Agreement, the rights of any prior user, and are non-exclusive and subordinate to the Reserved Rights.
Source: Item 23 — RECEIPTS (FDD pages 59–293)
What This Means (2024 FDD)
According to the 2024 C3 Wellness Spa Franchise Disclosure Document, a franchisee's 'Designated Territory' is a key aspect of the franchise agreement. C3 Wellness Spa, in its reasonable business judgment, can prevent a franchisee from soliciting spa customers outside their designated territory.
However, the FDD states that franchisees may face competition from other C3 Wellness Spa franchises and other system franchisees with spa locations and/or designated territories that are located adjacent to and/or within a close proximity to a franchisee's spa location and/or designated territory. Even though C3 Wellness Spa may disapprove of marketing mediums that reach outside of a franchisee's designated territory, they are not obligated to do so. Franchisees may face competition from other spas, spa location franchises, and system franchisees that market and promote their spas through various marketing activities that extend into the franchisee's designated territory.
The franchise agreement specifies that a franchisee will not receive any compensation if C3 Wellness Spa or another system franchisee solicits customers from within the franchisee's designated territory. The rights granted regarding the designated territory are subject to all terms and conditions of the agreement, the rights of any prior user, and are non-exclusive and subordinate to the reserved rights of C3 Wellness Spa.