Is the Territory for a Crown Gold Exchange franchise stated in the franchise agreement?
Crown_Gold_Exchange Franchise · 2024 FDDAnswer from 2024 FDD Document
or Crown Gold Exchange, which will include Franchisee's location (or territory) and telephone number.
ARTICLE 6. LOCATION, DEVELOPMENT, AND OPENING
6.1 Determining Location and Territory
- (i) Franchisee shall find a potential Location within the Development Area described on the Summary Page. Franchisee shall submit its proposed Location to Crown Gold Franchising for acceptance, with all related information Crown Gold Franchising may request. If Crown Gold Franchising does not accept the proposed Location in writing within 30 days, then it is deemed rejected.
- (ii) When Crown Gold Franchising accepts the Location, it will issue a Location Acceptance Letter in the form of Attachment 2 which states the Location and Territory. Crown Gold Franchising shall determine the Territory in its good faith discretion, substantially in accordance with Item 12 of the Franchise Disclosure Document. If Crown Gold Franchising fails to state the Territory in writing within 60 days after Franchisee opens the Business to the public, the Territory will be deemed to be the zip code which includes the location of the franchised business and the zip codes which immediately surround the location and together comprise a total of 50,000 population.
- 6.2 Lease. In connection with any lease between Franchisee and the landlord of the Location: (i) if requested by Crown Gold Franchising, Franchisee must submit the proposed lease to Crown Gold Franchising for written approval, (ii) the term of the lease (including renewal terms) must be for a period of not less than the term of this Agreement, and (iii) Franchisee shall use commercially reasonable efforts to obtain the landlord's signature to a rider to the lease in the form required by Crown Gold Franchising.
- 6.3 Development. Franchisee shall construct (or remodel) and finish the Location in conformity with Crown Gold Franchising's System Standards. If required by Crown Gold Franchising, Franchisee shall engage the services of an architect licensed in the jurisdiction of the Location. Franchisee shall not begin any construction or remodeling work without first obtaining Crown Gold Franchising's approval of Franchisee's plans.
Source: Item 22 — CONTRACTS (FDD pages 38–39)
What This Means (2024 FDD)
According to the 2024 Crown Gold Exchange Franchise Disclosure Document, the territory granted to a franchisee is defined in a Location Acceptance Letter, not explicitly within the franchise agreement itself. After the franchisee finds a potential location within the designated Development Area and submits it to Crown Gold Franchising for approval, Crown Gold Franchising will issue a Location Acceptance Letter that specifies both the location and the territory.
Crown Gold Franchising retains considerable discretion in determining the territory, stating that it will do so in good faith and substantially in accordance with Item 12 of the Franchise Disclosure Document. However, if Crown Gold Franchising fails to define the territory in writing within 60 days after the franchisee opens for business, the territory will default to the zip code of the franchised business location and the surrounding zip codes, encompassing a total population of 50,000.
Crown Gold Franchising also retains the right to establish or license other Crown Gold Exchange businesses outside the franchisee's territory, regardless of their proximity or impact. They can also operate or license businesses that do not use the Crown Gold Exchange brand name and sell products/services within the franchisee's territory through other distribution channels, including the internet. This means that while a franchisee has a protected territory against other Crown Gold Exchange outlets, there are other avenues through which Crown Gold Franchising can still compete within that area.