What is the condition for maintaining the Designated Territory granted to a Cinch I.T. franchisee?
Cinch_I_T Franchise · 2024 FDDAnswer from 2024 FDD Document
- (k) You shall use Your best efforts in operating the Franchised Business and in recommending, promoting and encouraging patronage of all CINCH I.T.
System businesses.
The grant of Your Designated Territory is expressly conditioned upon Your successful penetration of the market in the Designated Territory.
You must promote actively and aggressively the products and services of Your CINCH I.T.
Franchised Business within Your Designated Territory.
If You do not sell one new managed service provider ("Managed Service Provider") contract for three (3) consecutive months, We will require You to undertake and complete a performance improvement plan ("Performance Improvement Plan") over a consecutive three (3) month period.
The Performance Improvement Plan consists of a list of activity metrics assigned by Us that must be performed by You each week.
You must also attend a weekly accountability telephone conference to review the assigned metrics and Your results.
You will be charged in one (1) hour increments at Our then current rate as specified in subsection 13 (e) under remedial training for each accountability conference.
If after completion of the Performance Improvement Plan You do not sell one (1) new Managed Service Provider contract within three (3) months, You will be in default of Your Franchise Agreement and We may terminate the Franchise Agreement.
Source: Item 23 — RECEIPTS (FDD pages 60–269)
What This Means (2024 FDD)
According to Cinch I.T.'s 2024 Franchise Disclosure Document, a franchisee's ability to maintain their designated territory is tied to their compliance with the franchise agreement and their success in penetrating the market within that territory. The document states that as long as the franchisee adheres to all the terms and conditions outlined in the agreement, Cinch I.T. cannot alter the designated territory.
However, the grant of the designated territory is expressly conditioned upon the franchisee's successful penetration of the market. This means the franchisee must actively and aggressively promote Cinch I.T.'s products and services within their designated area. A key performance indicator is the acquisition of new managed service provider contracts.
Specifically, if a Cinch I.T. franchisee fails to secure at least one new managed service provider contract for three consecutive months, they will be required to participate in a performance improvement plan for another three months. This plan involves meeting specific activity metrics set by Cinch I.T. and attending weekly accountability conferences, for which the franchisee will be charged at an hourly rate. Failure to secure a new managed service provider contract within three months after completing the performance improvement plan can result in a default of the Franchise Agreement and potential termination.