factual

Does the Crawlspace Medic Franchise Agreement include a section on 'Grant of Franchise'?

Crawlspace_Medic Franchise · 2024 FDD

Answer from 2024 FDD Document

nd appearance, and the necessity of operating the business franchised hereunder in conformity with Franchisor's standards and specifications.

NOW, THEREFORE, the parties, in consideration of the promises, undertakings and commitments of each party to the other set forth herein, and intending to be legally bound hereby, mutually agree as follows:

  • 1. RECITATIONS. The Recitations set out above form part of this Agreement.
  • 2. GRANT OF FRANCHISE. Franchisor hereby grants to Franchisee and Franchisee accepts, upon the terms and conditions contained in this Agreement, the license to operate a Crawlspace Medic franchise (the "Franchised Business"), using only the Marks licensed hereunder, in strict conformity with the System, which may be changed,

improved and further developed by Franchisor from time to time. This grant applies only to a single 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. Franchisee understands and agrees that all rights to any businesses, other than as specified in this Agreement, are fully reserved to Franchisor within or outside of the Territory. By way of example only, Franchisor reserves the rights to offer (i) other products or services not offered under the Marks, (ii) other crawlspace or basement care and repair concepts under the Marks or other trademarks, including licensing Franchisor's designs for use in other formats and (iii) products or services through any channel in the Territory other than a dedicated Crawlspace Medic location, such as the Internet ("Alternate Distribution Channels"). Franchisee will receive no compensation for Franchisor's sales through Alternate Distribution Channels made within the Territory. Franchisor also reserves the right to acquire, be acquired by or merge with another company. Franchisee agrees that such implementation of Franchisor's rights pursuant to this Section 3.2 is deemed not to impair or injure Franchisee's rights pursuant to Section 2 hereof.
  • 3.3 Minimum Performance Requirements.

Source: Item 22 — CONTRACTS (FDD page 42)

What This Means (2024 FDD)

According to Crawlspace Medic's 2024 Franchise Disclosure Document, the franchise agreement does include a section addressing the grant of franchise rights. Specifically, Section 2.1 outlines the grant of development rights, where Crawlspace Medic grants the developer the right to develop, construct, open, and operate one Crawlspace Medic outlet within a defined development area, contingent upon the terms and conditions set forth in the agreement, including the execution of a Franchise Agreement. This section clarifies the scope and limitations of the rights granted to the developer.

However, it's important to note that Section 2.3 explicitly states that the agreement itself is not a Franchise Agreement and does not grant the developer the right to operate a Crawlspace Medic outlet, distribute products or services, or use the Crawlspace Medic marks. The rights to open and operate a Crawlspace Medic outlet and use the system and marks are only derived through the execution of a separate Franchise Agreement for each outlet to be established in the development area. This distinction is crucial for understanding the phased approach of development rights versus full franchise rights.

Furthermore, Section 3.1 details the territory rights granted to a franchisee, stating that the agreement grants the right to operate the franchised business at a single location within the designated territory. Crawlspace Medic agrees not to allow other franchisees to operate a franchised location within the same territory using the same marks, as long as the franchisee is not in default and the agreement is active. However, Crawlspace Medic reserves the right to open, operate, or franchise locations around, bordering, and adjacent to the territory, with the franchisee selling products and services from a location within their territory and providing services to customers within that territory.

Disclaimer: This information is extracted from the 2024 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.