How does Chocolate Fish Franchising determine the territory for a Chocolate Fish Coffee franchise?
Chocolate_Fish_Coffee Franchise · 2024 FDDAnswer from 2024 FDD Document
t. Chocolate Fish Franchising shall maintain a website for Chocolate Fish Coffee, which will include Franchisee's location (or territory) and telephone number.
ARTICLE 6. LOCATION, DEVELOPMENT, AND OPENING
6.1 Determining Location and Territory.
- (i) Franchisee shall find a potential Location within the Development Area described on the Summary Page. Franchisee shall submit its proposed Location to Chocolate Fish Franchising for acceptance, with all related information Chocolate Fish Franchising may request. If Chocolate Fish Franchising does not accept the proposed Location in writing within 30 days, then it is deemed rejected.
- (ii) When Chocolate Fish Franchising accepts the Location, it will issue a Location Acceptance Letter in the form of Attachment 2 which states the Location and Territory. Chocolate Fish Franchising shall determine the Territory in its good faith discretion, substantially in accordance with Item 12 of the Franchise Disclosure Document. If Chocolate Fish Franchising fails to state the Territory in writing within 60 days after Franchisee opens the Business to the public, the Territory will be deemed to be the zip code which includes the location of the franchised business and those zip codes which immediately surround the location of the franchised business and together comprise a total of 40,000 population.
- 6.2 Lease. In connection with any lease between Franchisee and the landlord of the Location: (i) if requested by Chocolate Fish Franchising, Franchisee must submit the proposed lease to
Chocolate Fish Franchising for written approval, (ii) the term of the lease (including renewal terms) must be for a period of not less than the term of this Agreement, and (iii) Franchisee shall use commercially reasonable efforts to obtain the landlord's signature to a rider to the lease in the form required by Chocolate Fish Franchising.
- 6.3 Development. Franchisee shall construct (or remodel) and finish the Location in conformity with Chocolate Fish Franchising's System Standards.
Source: Item 23 — RECEIPTS (FDD pages 41–119)
What This Means (2024 FDD)
According to the 2024 Chocolate Fish Coffee Franchise Disclosure Document, the territory for a franchise is determined by Chocolate Fish Franchising. The franchisee is responsible for finding a potential location within a defined development area and submitting it to Chocolate Fish Franchising for approval. If Chocolate Fish Franchising does not respond in writing within 30 days, the location is considered rejected. Upon acceptance of the location, Chocolate Fish Franchising will issue a Location Acceptance Letter, which includes the territory details.
Chocolate Fish Franchising determines the territory in its "good faith discretion, substantially in accordance with Item 12 of the Franchise Disclosure Document." However, if Chocolate Fish Franchising fails to define the territory in writing within 60 days after the franchise opens, the territory will default to the zip code of the franchise location and the surrounding zip codes, encompassing a total population of 40,000.
Chocolate Fish Franchising retains specific rights regarding territory. They can establish or license other Chocolate Fish Coffee businesses outside the franchisee's territory, even if they are nearby or impact the franchisee's business. They also reserve the right to operate or license businesses that do not use the Chocolate Fish Coffee brand name anywhere. Additionally, Chocolate Fish Coffee can sell and license others to sell products and services within the franchisee's territory through other distribution channels, including the internet, excluding Chocolate Fish Coffee outlets. This means that while franchisees have a protected territory against other branded Chocolate Fish Coffee locations, Chocolate Fish Coffee retains significant control over other avenues of distribution and brand expansion.