Is a Crawlspace Medic franchisee allowed to solicit customers outside of their territory?
Crawlspace_Medic Franchise · 2024 FDDAnswer from 2024 FDD Document
- 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.
Source: Item 22 — CONTRACTS (FDD page 42)
What This Means (2024 FDD)
According to Crawlspace Medic's 2024 Franchise Disclosure Document, a franchisee is generally restricted to selling and soliciting customers within their designated territory. The franchise agreement grants the right to operate the franchised business at a single location within the defined territory. While Crawlspace Medic reserves the right to open or franchise other locations around or adjacent to the franchisee's territory, the franchisee themselves are expected to focus their sales and service efforts within their assigned area.
However, Crawlspace Medic retains significant rights regarding other business activities within and outside the franchisee's territory. For example, Crawlspace Medic can offer other products or services, including crawlspace or basement care, under different trademarks or through alternative channels like the internet. The franchisee will not receive compensation for Crawlspace Medic's sales through these alternative channels, even if they occur within the franchisee's territory.
After the agreement expires or terminates, the franchisee is restricted from diverting business or customers from the Crawlspace Medic system to competitors. This includes not participating in any crawlspace or basement service business within 25 miles of their former territory or any Crawlspace Medic location. These restrictions highlight the importance of understanding the defined territory and the limitations on soliciting customers outside of it, both during and after the franchise agreement term.