Are Chop5 Salad Kitchen franchisees in Washington subject to Section 3 of the agreement?
Chop5_Salad_Kitchen Franchise · 2024 FDDAnswer from 2024 FDD Document
- 3. TERRITORIAL RIGHTS AND LIMITATIONS. We grant you a territory (your "Territory") that consists of the area within a one-half (½) mile radius from the site that we approve for your Restaurant. During the Term we will not develop or operate, or license a third party to develop or operate, a Restaurant that is physically located within the Territory except as otherwise provided in this Section with respect to Captive Venues and Acquisitions. At any time during the Term we reserve the right to: (a) develop and operate, and license third parties to develop and operate, Restaurants in Captive Venues that are located within your Territory; and (b) engage in Acquisitions, even if as a result of an Acquisition one or more competitive businesses of the acquired or acquiring company begin using our Intellectual Property (including our Marks) and are located within the Territory. We reserve the right to sell, and license third parties to sell, competitive or identical goods and services (including under the Marks) within the Territory through Alternative Channels of Distribution.
Source: Item 23 — RECEIPT (FDD pages 50–178)
What This Means (2024 FDD)
According to the 2024 Chop5 Salad Kitchen Franchise Disclosure Document, Section 3 of the franchise agreement outlines the territorial rights and limitations granted to franchisees. Specifically, it states that Chop5 Salad Kitchen grants a territory consisting of the area within a one-half (½) mile radius from the approved site for the Restaurant.
During the term of the agreement, Chop5 Salad Kitchen will not develop or operate, nor license a third party to do so, a Restaurant physically located within the franchisee's Territory. However, there are exceptions, including the right to develop Restaurants in Captive Venues within the Territory and to engage in Acquisitions that may result in competitive businesses using Chop5 Salad Kitchen's intellectual property within the Territory. Chop5 Salad Kitchen also retains the right to sell competitive or identical goods and services within the Territory through Alternative Channels of Distribution.
This section does not specify any state-specific exceptions or conditions. Therefore, franchisees in Washington would be subject to the same territorial rights and limitations as franchisees in any other state, as defined in Section 3 of the Chop5 Salad Kitchen franchise agreement. Prospective franchisees should carefully consider these territorial rights and limitations, including the potential for competition from Captive Venues, Acquisitions, and Alternative Channels of Distribution, when evaluating the franchise opportunity.