Can a Cr3 American Exteriors franchisee face competition from other channels of distribution that Cr3 American Exteriors controls?
Cr3_American_Exteriors Franchise · 2025 FDDAnswer from 2025 FDD Document
ftware that we feel is reliable. The franchise is for a specific location and will be designated on Schedule 1 of your Franchise Agreement.
You will not receive an exclusive territory. You may face competition from other franchisees, from outlets that we own, from other channels of distribution or competitive brands that we control.
While you will not receive an exclusive territory, your Territory will be protected in that we will not establish a company-owned location or allow another person to establish a franchised outlet selling the same or similar goods or services under the same or similar trademarks or service Marks within your Territory, except as described in this Item 12.
Our territories are not entirely exclusive, because you (and other franchisees of ours) may accept customers outside of your (or their) territory through general networking or referrals from existing customers. However, other activity outside of the Territory is restricted. You may not solicit clients outside of your Territory, through the use of other channels of distribution, such as the Internet, catalog sales, telemarketing, or other direct marketing. We will permit you to utilize internet and social media marketing; however, you must take commercially reasonable efforts to ensure such marketing is geocentric and tailored to your Territory. Further, if more than 25% of your Gross Revenues are derived from approved operations from outside your Territory in any 12-month period during the term of your franchise agreement, then you must either purchase an additional franchise and execute a separate franchise agreement for such territory or purchase the right to expand the geographical boundaries of your existing Territory.
Source: Item 23 — RECEIPTS (FDD pages 53–150)
What This Means (2025 FDD)
According to Cr3 American Exteriors's 2025 Franchise Disclosure Document, a franchisee may face competition from other channels of distribution that Cr3 American Exteriors controls. Specifically, while franchisees do not receive an exclusive territory, Cr3 American Exteriors states that it will not establish a company-owned location or allow another person to establish a franchised outlet selling the same or similar goods or services under the same or similar trademarks or service marks within the boundary of the franchisee's territory.
However, Cr3 American Exteriors or its affiliates reserve 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 a franchisee's territory using their principal trademarks. While Cr3 American Exteriors states it would normally direct inquiries for services from within a franchisee's territory to their outlet, they are not obligated to compensate the franchisee for soliciting or accepting customers from inside the franchisee's territory through these other channels.
Furthermore, Cr3 American Exteriors or an affiliate may make sales within a franchisee's territory using trademarks different from the ones the franchisee will use under the Franchise Agreement. They also reserve the right to develop, acquire, be acquired by, or otherwise engage in any transaction with other businesses (competitive or not), which may offer products and services like the franchisee's Franchised Business and may have one or more competing outlets within the franchisee's territory. This means that while Cr3 American Exteriors offers some territorial protection against direct competition from outlets using the same trademarks, franchisees may still face competition from other channels and brands controlled or affiliated with Cr3 American Exteriors.