What is the definition of 'Territory' for a Chocolate Bash franchise as it relates to protected territory?
Chocolate_Bash Franchise · 2024 FDDAnswer from 2024 FDD Document
ments, and modifications thereto), uniforms, and vehicles.
"Territory" means the territory stated on the Summary Page. If no territory is stated on the Summary Page, then the Territory is determined in accordance with Section 6.1.
"Transfer" means for Franchisee (or any Owner) to voluntarily or involuntarily transfer, sell, or dispose of, in any single or series of transactions, (i) substantially all of the assets of the Business, (ii) this Agreement, (iii) direct or indirect ownership interest of more than 25% of the Business, or (iv) control of the Business.
ARTICLE 2. GRANT OF LICENSE
- 2.1 Grant. CB Franchising grants to Franchisee the right to operate a Chocolate Bash business solely at the Location.
Source: Item 22 — CONTRACTS (FDD pages 38–39)
What This Means (2024 FDD)
According to Chocolate Bash's 2024 Franchise Disclosure Document, the 'Territory' for a franchise is defined as the territory stated on the Summary Page of the Franchise Agreement. However, if no territory is specified on the Summary Page, the territory will be determined in accordance with Section 6.1 of the agreement.
Chocolate Bash grants franchisees a protected territory, meaning that CB Franchising will not establish or license another Chocolate Bash business within the defined Territory. However, CB Franchising retains the right to establish and license Chocolate Bash businesses outside the Territory, operate and license other businesses that do not operate under the Chocolate Bash brand name anywhere, and sell and license others to sell products and services within the Territory through other distribution channels, including the internet, that are not Chocolate Bash outlets.
For a prospective franchisee, this means the exclusivity of their territory depends on what is stated in the Franchise Agreement's Summary Page or as determined by Chocolate Bash in accordance with Section 6.1. It is important to note that while franchisees have some territorial protection against other Chocolate Bash locations, Chocolate Bash retains significant rights to operate or license other businesses, including online sales, within the franchisee's territory. This could impact a franchisee's potential customer base and revenue.