Does Closet Storage Concepts have the right to convert other business locations to Closet Storage Concepts Franchised Businesses?
Closet_Storage_Concepts Franchise · 2025 FDDAnswer from 2025 FDD Document
You have no right to distribute any products or services offered by your Franchised Business through any alternate channels of distribution such as Internet, catalogs, telemarketing or direct marketing.
We and/or our affiliates reserve all other rights with respect to your Territory, which include but are not limited to: (i) the right to own, operate, franchise or license (whether in connection with a merger or acquisition or otherwise), businesses of any type operating under names other than the Proprietary Marks, regardless of whether or not these other concepts offer products and services which are similar to or competitive with those offered by your Franchised Business and the right to convert those locations to Franchised Businesses; (ii) the right to distribute products and services in alternative channels of distribution both within and outside the Territory, (which alternative channels of distribution include but are not limited to: sales of products at or through club stores, and specialty stores, in addition to sales of products by mail order, catalog, or via the internet, and any similar outlets or distribution methods); (iii) the right to be acquired by (or merge or become affiliated with) any other business operating under names other than the Proprietary Marks, including a competing business, with locations anywhere, which may result in the required conversion of Franchised Businesses. We and our affiliates are under no
obligation to pay you any compensation for selling similar products or services through other channels of distribution under the same and/or different proprietary marks within the Territory.
Source: Item 12 — TERRITORY (FDD pages 38–40)
What This Means (2025 FDD)
According to the 2025 Closet Storage Concepts Franchise Disclosure Document, Closet Storage Concepts retains specific rights regarding business operations within a franchisee's territory. Closet Storage Concepts and its affiliates have the right to own, operate, franchise, or license businesses of any type under names other than the Closet Storage Concepts Proprietary Marks. This includes the right to convert these other business locations into Closet Storage Concepts Franchised Businesses.
This provision means that Closet Storage Concepts could potentially operate or franchise other businesses, even those offering similar or competitive products, under different brand names within a franchisee's territory. They can also convert these businesses into Closet Storage Concepts franchises. This could increase competition for franchisees.
Furthermore, Closet Storage Concepts is not obligated to compensate franchisees for selling similar products or services through these other channels of distribution, even if they operate under the same or different proprietary marks within the franchisee's territory. This highlights a potential risk for franchisees, as Closet Storage Concepts retains considerable control over business operations and brand expansion within and outside of the designated territory.