Is a Crawlspace Medic franchisee prohibited from selling through alternative distribution channels?
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 the 2024 Crawlspace Medic Franchise Disclosure Document, a franchisee is indeed restricted from selling and soliciting customers through alternative distribution channels. The agreement grants the franchisee the right to operate the franchised business at a single location within a defined territory. However, Crawlspace Medic retains the right to operate or franchise other locations around or adjacent to the franchisee's territory.
Specifically, Crawlspace Medic reserves the rights to offer other products or services not offered under the Marks, 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 products or services through any channel in the Territory other than a dedicated Crawlspace Medic location, such as the Internet ("Alternate Distribution Channels").
This means that while a franchisee focuses on their dedicated location, Crawlspace Medic can explore other avenues like online sales or different service offerings within the same territory. The franchisee will not receive any compensation for sales made by Crawlspace Medic through these alternative channels within their territory. This reservation of rights allows Crawlspace Medic to diversify its market reach, but it also means the franchisee's sales are limited to their physical location and direct customer interactions.