What is the relationship between the 'System' and the 'Franchised Business' for a C3 Wellness Spa?
C3_Wellness_Spa Franchise · 2024 FDDAnswer from 2024 FDD Document
WHEREAS, Franchisor has developed a distinctive and proprietary system (the "System") for the nonmedical development, management and, potentially, the operation of a spa (the "Spa") that offers and provides facial treatment services, medical spa services, wellness programs, medical testing, bioidentical hormone replacement, IV vitamin therapy, massage therapy services, physical therapy, light and laser skin enhancement, cosmetic services, topical skin treatments, essential oils, and spa related services and retail products (the "Approved Spa Products and Services") under the Licensed Marks (defined below);
WHEREAS, the System relates to and includes the development and operation of a spa location franchised business (hereinafter referred to as either the "Spa Location Franchise" or the "Franchised Business"), that depending on Franchisee's qualifications and applicable local, state and federal laws and regulations involves either:
a Spa Location Franchise that Owns and Operates a Spa: Franchisee's development and operation of a Spa Location Franchise that owns and operates a Spa that provides the Approved Spa Products and Services under the Licensed Marks and in accordance with the requirements of the System; or
a Spa Location Franchise that Owns and Operates a Spa Facility and Management Company: Franchisee's development and operation of a Spa Location Franchise that owns and operates a management business (the "Spa Management Business") that provides management, marketing, and spa facility based services (the "Spa Facility and Management Services") to medical practices, professional corporations and licensed professionals authorized to offer and provide the Approved Spa Products and Services (hereinafter referred to as "Authorized Care Providers") at a Spa that is operated and potentially owned by the Authorized Care Providers authorized to offer and provide the Approved Spa Products and Services.
Source: Item 23 — RECEIPTS (FDD pages 59–293)
What This Means (2024 FDD)
According to C3 Wellness Spa's 2024 Franchise Disclosure Document, the 'System' is central to the operation of a C3 Wellness Spa franchised business. The franchisor has developed a distinctive and proprietary system for the non-medical development, management, and potential operation of a spa. This system is used for spas that offer facial treatment services, medical spa services, IV vitamin therapy, and other related services and retail products under the Licensed Marks. The franchised business, also referred to as a 'Spa Location Franchise,' operates in accordance with the requirements of this System.
The System dictates how a franchisee develops and operates their C3 Wellness Spa. Depending on the franchisee's qualifications and local regulations, the franchised business can take one of two forms: either a Spa Location Franchise that owns and operates a spa providing approved services under the Licensed Marks, or a Spa Location Franchise that owns and operates a management business providing management, marketing, and spa facility-based services to medical practices and licensed professionals who are authorized to offer the approved spa products and services. In both scenarios, adherence to the System is a condition of the franchise agreement.
Specifically, the C3 Wellness Spa franchisee must offer approved spa products and services under the Licensed Marks, exclusively using system supplies and complying with the franchisor's requirements as detailed in the operations manual. The franchisee is granted a territory where the franchisor will not operate or franchise another spa using the Licensed Marks and System, although the franchisee may face competition from other C3 Wellness Spa franchises located nearby. The franchisor retains the right to modify, replace, and discontinue the Licensed Marks in their reasonable business judgment, indicating that the franchisee must adapt to changes made to the System and branding.