Does Cr3 American Exteriors grant exclusive territories to its franchisees?
Cr3_American_Exteriors Franchise · 2025 FDDAnswer from 2025 FDD Document
We will grant you a Territory for a specific geographic region that we define by zip codes, natural, or political boundaries. A Territory will normally include a minimum population of approximately 500,000 residents, as determined by the U.S. Census Bureau or mapping software 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 12 — TERRITORY (FDD pages 38–39)
What This Means (2025 FDD)
According to Cr3 American Exteriors's 2025 Franchise Disclosure Document, franchisees do not receive an exclusive territory. The territory is defined by zip codes, natural, or political boundaries, typically including a minimum population of approximately 500,000 residents. While not exclusive, Cr3 American Exteriors protects the territory by not establishing company-owned locations or allowing other franchisees to operate under the same trademarks within the assigned area, with certain exceptions.
Cr3 American Exteriors franchisees may encounter competition from other franchisees, company-owned outlets, alternative distribution channels, or competing brands controlled by the franchisor. Franchisees can accept customers outside their territory through general networking or referrals, but actively soliciting clients outside the designated area through methods like internet marketing (unless geocentric and tailored to the territory), catalog sales, or telemarketing is restricted. If over 25% of a franchisee's gross revenues come from operations outside their territory in any 12-month period, they must either purchase an additional franchise for that area or expand their existing territory.
Cr3 American Exteriors retains several rights that could impact a franchisee's territory. These include using other distribution channels like the internet to solicit customers within the territory without compensating the franchisee, implementing cross-territorial protocols, and operating or franchising businesses under different trademarks that offer similar goods or services. Cr3 American Exteriors also reserves the right to engage in transactions with other businesses, even competitors, potentially leading to competing outlets within a franchisee's territory, although they will not convert any acquired business in your Territory to a franchise using our primary trademarks during the Term of your Franchise Agreement. These stipulations highlight the importance of understanding the competitive landscape and the franchisor's rights within a franchisee's territory.