What is the definition of 'Territory' for a Chocolate Fish Coffee franchise?
Chocolate_Fish_Coffee Franchise · 2024 FDDAnswer from 2024 FDD Document
"Territory" means the territory stated on the Location Acceptance Letter.
ARTICLE 2. GRANT OF LICENSE
- 2.1 Grant. Chocolate Fish Franchising grants to Franchisee the right to operate a Chocolate Fish Coffee business solely at the Location.
If no Location is stated on the Summary Page when this Agreement is signed, then the parties will determine the Location in accordance with Section 6.1.
Franchisee shall develop, open and operate a Chocolate Fish Coffee business at the Location for the entire term of this Agreement.
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.
Source: Item 23 — RECEIPTS (FDD pages 41–119)
What This Means (2024 FDD)
According to Chocolate Fish Coffee's 2024 Franchise Disclosure Document, the 'Territory' is defined as the territory stated on the Location Acceptance Letter. The Location Acceptance Letter is issued when Chocolate Fish Franchising accepts the franchisee's proposed location. This letter specifies both the Location and the Territory granted to the franchisee.
Chocolate Fish Franchising determines the Territory at its discretion, guided by Item 12 of the Franchise Disclosure Document. However, if Chocolate Fish Franchising fails to define the Territory in writing within 60 days after the franchisee opens for business, the Territory will default to the zip code containing the franchised business location, along with the immediately surrounding zip codes, encompassing a total population of 40,000.
This definition is important for prospective franchisees as it clarifies how their exclusive operating area is determined. The franchisee's protected territory dictates where Chocolate Fish Franchising will not establish or license another Chocolate Fish Coffee business. Understanding the territory definition is crucial for assessing the market potential and competitive landscape of the franchise.