Are the rights and remedies under the Chocolate Bash franchise agreement exclusive?
Chocolate_Bash Franchise · 2024 FDDAnswer from 2024 FDD Document
- 2.2 Protected Territory. CB Franchising shall not establish, nor license the establishment of, another Chocolate Bash business within the Territory.
CB Franchising retains the right to:
(i) establish and license others to establish and operate Chocolate Bash businesses outside the Territory;
(ii) operate and license others to operate businesses anywhere that do not operate under the Chocolate Bash brand name; and
(iii) sell and license othersto sell products and services in the Territory through channels of distribution (including the internet) other than Chocolate Bash outlets.
Source: Item 22 — CONTRACTS (FDD pages 38–39)
What This Means (2024 FDD)
According to Chocolate Bash's 2024 Franchise Disclosure Document, the franchise agreement does not explicitly state that the rights and remedies are exclusive. However, it does specify certain rights granted to the franchisee within a defined territory.
Specifically, Chocolate Bash agrees not to establish or license another Chocolate Bash business within the franchisee's designated territory. However, Chocolate Bash retains the right to operate or license others to operate businesses outside the territory, even if they do not operate under the Chocolate Bash brand name. They also retain the right to sell and license others to sell products and services within the franchisee's territory through other distribution channels, including the internet, that are not Chocolate Bash outlets.
This means that while a franchisee is granted some territorial protection, Chocolate Bash reserves significant rights to operate and license businesses that may compete with the franchisee's business, both inside and outside of the defined territory. A prospective franchisee should consider the potential impact of these retained rights on their business before investing in a Chocolate Bash franchise.