Is a Cr3 American Exteriors franchisee likely to face competition from other channels of distribution?
Cr3_American_Exteriors Franchise · 2025 FDDAnswer from 2025 FDD Document
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 12 — TERRITORY (FDD pages 38–39)
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. While Cr3 American Exteriors grants a territory, it is not exclusive.
The FDD specifies that Cr3 American Exteriors, its parent company, and 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. This means that even within a defined territory, Cr3 American Exteriors can directly compete for customers using these alternative methods without compensating the franchisee.
This lack of exclusivity and the franchisor's ability to utilize other distribution channels within a franchisee's territory could impact a franchisee's potential customer base and revenue. A prospective franchisee should consider the potential impact of this competition when evaluating the Cr3 American Exteriors franchise opportunity.