What actions by the Crawlspace Medic franchisee would remove the territorial protection?
Crawlspace_Medic Franchise · 2024 FDDAnswer from 2024 FDD Document
ngle location within a territory that is designated in Attachment 2 attached hereto and incorporated herein (the "Territory").
3. TERRITORY
- 3.1 Territory. This Agreement grants Franchisee the right to operate the Franchised Business at a single location within the Territory. Franchisor agrees that Franchisor will not, and Franchisor will not permit any other of our franchisees, to operate a franchised Crawlspace Medic location in the Territory using the same Marks as licensed to Franchisee in this Agreement so long as Franchisee is not in default under this Agreement or this Agreement has not expired or been terminated. Except as otherwise specified in this Agreement, Franchisor reserves the right to open, operate or franchise Crawlspace Medic franchises around, bordering and adjacent to the Territory. Franchisee will be selling its products and services from a location within the territory, and will provide services to customers within that territory. Franchisee is prohibited from selling and soliciting customers through alternative distribution channels as more fully specified herein.
- 3.2 Reservation of Rights.
Source: Item 22 — CONTRACTS (FDD page 42)
What This Means (2024 FDD)
According to Crawlspace Medic's 2024 Franchise Disclosure Document, a franchisee's territorial protection is contingent upon remaining in compliance with the franchise agreement. Specifically, the agreement states that Crawlspace Medic will not operate or allow another franchisee to operate a franchised location within the franchisee's territory, as long as the franchisee is not in default under the agreement and the agreement has not expired or been terminated. This indicates that any breach of the franchise agreement could jeopardize the franchisee's exclusive territory.
To maintain the territory, the Crawlspace Medic franchisee must meet certain minimum performance requirements for revenue per year. While the specific revenue targets are not detailed in the provided excerpts, the document emphasizes that failure to meet these requirements could impact the franchisee's territorial rights. The franchisor also retains rights to operate other businesses or offer products/services through alternative channels (like the internet) within the franchisee's territory, without providing compensation to the franchisee.
In summary, a Crawlspace Medic franchisee's territorial protection is not absolute and depends on adherence to the franchise agreement and meeting minimum performance standards. Prospective franchisees should carefully review the full franchise agreement, including Attachment 2, to understand the exact boundaries of their territory and the specific revenue requirements to maintain it. They should also inquire about how the franchisor's reserved rights to alternative distribution channels might affect their business within the territory.