Is Cr3 American Exteriors allowed to own outlets that compete with franchisees?
Cr3_American_Exteriors Franchise · 2025 FDDAnswer from 2025 FDD Document
eir) Territory, including through the use of other channels of distribution, such as the Internet, catalog sales, telemarketing, or other direct marketing. If you engage in internet or social media marketing, you must take commercial reasonable efforts to ensure such marketing is geocentric and tailored to your Territory.
C. Profit Passover
We or an affiliate reserves the right to use other channels of distribution, such as the Internet, catalog sales, telemarketing, or other direct marketing sales, to solicit or accept customers within your Territory using our principal trademarks; however, we would normally direct inquiries for services from within your Territory to your outlet.
Source: Item 23 — RECEIPTS (FDD pages 53–150)
What This Means (2025 FDD)
The 2025 Franchise Disclosure Document for Cr3 American Exteriors addresses the possibility of competition through other channels of distribution. Cr3 American Exteriors reserves the right to use other channels of distribution. However, franchisees may accept customers outside of their territory through general networking or referrals, but they cannot solicit clients outside of their territory through channels like the Internet, catalog sales, telemarketing, or other direct marketing. If a franchisee uses internet or social media marketing, they must make commercially reasonable efforts to ensure such marketing is geocentric and tailored to their Territory.
This policy means that while Cr3 American Exteriors retains the right to explore alternative distribution methods, franchisees are protected from direct competition within their designated territories through specific marketing activities. Franchisees are allowed to serve customers who find them organically or through referrals, even if those customers are located outside their territory.
For a prospective franchisee, this implies a need to focus marketing efforts within their territory while still being able to capitalize on word-of-mouth referrals from outside their area. It also highlights the importance of understanding what constitutes permissible networking versus prohibited solicitation. A franchisee should seek clarification from Cr3 American Exteriors regarding what specific activities are considered 'commercially reasonable efforts' to tailor marketing to their territory.