What is the geographic scope of the 'Protected Territory' for a Cd One Price Cleaners franchise?
Cd_One_Price_Cleaners Franchise · 2025 FDDAnswer from 2025 FDD Document
You have certain territorial rights in 2 specified geographic areas that we define in the Franchise Agreement as the "Protected Territory" and the "ROFO Territory." If we determine that the Site is in an urban environment, then the Protected Territory is a ½-mile radius around the Store and the ROFO Territory is a 1-mile radius around the Store (excluding the Protected Territory). If we determine that the Site is not in an urban environment, then the Protected Territory is a 1-mile radius around the Store and the ROFO Territory is a 2-mile radius around the Store (excluding the Protected Territory). Our determination is final, and we and you will list the Protected Territory and ROFO Territory in the Franchise Agreement before signing it.
The Protected Territory is an exclusive territory under the Franchise Agreement. This "exclusivity" in the Protected Territory means that if you are not in default under the Franchise Agreement: (a) we will not operate, or grant a franchise to any other person to operate, a CD Store the physical premises of which are located within the Protected Territory; and (b) we will not operate, or grant a franchise to any other person to operate, a CD Store the physical premises of which are located within the ROFO Territory unless we comply with the provisions described below concerning your right of first offer.
Source: Item 12 — Territory (FDD pages 47–52)
What This Means (2025 FDD)
According to Cd One Price Cleaners' 2025 Franchise Disclosure Document, the geographic scope of the Protected Territory depends on whether the site is in an urban environment. If Cd One Price Cleaners determines the site is in an urban environment, the Protected Territory is a ½-mile radius around the store, while the ROFO Territory is a 1-mile radius around the store, excluding the Protected Territory. If the site is not in an urban environment, the Protected Territory expands to a 1-mile radius around the store, and the ROFO Territory becomes a 2-mile radius around the store, again excluding the Protected Territory. Cd One Price Cleaners' determination of whether the site is urban or not is final, and the specifics of the Protected Territory and ROFO Territory will be documented in the Franchise Agreement before signing.
The Protected Territory provides a degree of exclusivity, meaning that Cd One Price Cleaners will not operate or franchise another CD Store with physical premises inside the Protected Territory. They also will not operate or franchise a CD Store within the ROFO Territory without first offering the franchisee the right of first offer. However, this exclusivity is limited to physical store locations.
Cd One Price Cleaners retains the right to market and sell goods and services, including through channels like the Internet, within the Protected Territory and ROFO Territory. Other CD Stores, regardless of ownership, can also solicit and deliver to customers within the franchisee's Protected Territory and ROFO Territory without any obligation to compensate the franchisee. This means that while the franchisee has some territorial protection against new physical stores, they face competition from other channels and existing stores, which is a common practice in franchising.