Does a Crawlspace Medic franchisee receive an exclusive territory?
Crawlspace_Medic Franchise · 2024 FDDAnswer from 2024 FDD Document
[Item 12: TERRITORY]
ITEM 12: TERRITORY
Under the Franchise Agreement, you have the right to establish and operate one (1) Crawlspace Medic outlet within a territory, or Area of Primary Responsibility (the "Territory"). You are required to establish a warehouse/office space located within your territory. The Protected Territory will be based on a particular area surrounding your Crawlspace Medic office and will include a minimum population of fifty thousand (50,000) dwellings with crawlspaces or partial basements. The Territory will be delineated by streets, highways, Zip Codes or other readily ascertainable geographic boundaries. The Protected Territory will be described in Attachment 2 to the Franchise Agreement prior to the purchase of a franchise, or in some cases, prior to the execution of a lease agreement. Population figures will be based upon the most recent available U.S. Census data at the time the Protected Territory is designated.
If you have an adjacent open territory, you may service customers from that territory, however that revenue does not count toward your Minimum Performance Requirement.
You are required to maintain the following Minimum Performance Requirements for Total Revenue during the term of your franchise agreement.
Year 1 Year 2 Year 3 Year 4 Year 5 Minimum Performance Requirements Revenue Per Year of Agreement $225,000 $350,000 $600,000 $750,000 $900,000
Total Revenue
The revenue that makes up your Minimum Performance Requirement must come from within your protected territory. If you fail to maintain these Minimum Performance Requirements, it is considered a default of your franchise agreement and we have the right to either reduce the size of your territory or terminate the franchise relationship.
During the term of your Franchise Agreement, and provided that you are not in default of your Franchise Agreement, we will not open another Crawlspace Medic outlet or grant the right to anyone else to open a Crawlspace Medic outlet within the Territory. However, notwithstanding this limited protection right we grant to you, we reserve all rights to sell our products and services under the Marks in the Territory through alternative distribution channels, as discussed below.
Source: Item 12 — TERRITORY (FDD pages 29–30)
What This Means (2024 FDD)
According to Crawlspace Medic's 2024 Franchise Disclosure Document, franchisees do not receive an exclusive territory. However, franchisees are granted the right to operate one Crawlspace Medic outlet within a designated territory, referred to as the Area of Primary Responsibility. This territory is based around the franchisee's office and includes a minimum of 50,000 dwellings with crawlspaces or partial basements, delineated by streets, highways, Zip Codes, or other geographic boundaries. This territory will be described in an attachment to the Franchise Agreement. During the term of the Franchise Agreement, Crawlspace Medic will not open another outlet or grant the right to anyone else to open one within the Territory, provided the franchisee is not in default of the agreement.
Even with this limited protection, Crawlspace Medic retains the right to sell products and services under the Marks within the Territory through alternative distribution channels. These alternative distribution channels could include licensing designs for use in other formats or sales through the internet. The franchisee will not receive any compensation for sales made through these alternative channels within their territory.
To maintain the territory, Crawlspace Medic franchisees must meet minimum performance requirements for total revenue, which increases over the first five years of the agreement. The revenue that makes up the Minimum Performance Requirement must come from within the protected territory. Failing to meet these requirements can result in a reduction of the territory size or termination of the franchise agreement. The minimum total revenue requirements are $225,000 in Year 1, $350,000 in Year 2, $600,000 in Year 3, $750,000 in Year 4, and $900,000 in Year 5.