Can Deck Medic acquire a business that offers similar services to a Deck Medic franchise?
Deck_Medic Franchise · 2024 FDDAnswer from 2024 FDD Document
We and our affiliates reserve to ourselves the exclusive right on any and all terms and conditions that we deem advisable and, without any compensation or consideration to you (Franchise Agreement, Article 2.D.), to engage in the following activities (our "Reserved Rights"): (a) operate and grant to others the right to develop and operate Deck Medic Businesses using the System and Licensed Marks outside your Operating Territory, as we deem appropriate and irrespective of the proximity to your Operating Territory; (b) acquire, merge with or otherwise affiliate with one or more businesses of any kind, including businesses that offer and sell products and services that are the same as, or similar to, your Deck Medic Business, and after such acquisition, merger or affiliation, to own and operate and to franchise or license others to own and operate and to continue to own and operate such businesses of any kind, even if such businesses offer and sell products and services that are the same as or similar to a the Franchised Business (but not utilizing the Licensed Marks) within your Operating Territory; (c) be acquired by or merge with or otherwise affiliate with one or more businesses of any kind, including businesses that offer and sell products and services that are the same as or similar to the Franchised Business, even if such business or businesses presently or, in the future, own and operate and franchise or license others to own and operate businesses that offer and sell products and services that are the same as or similar to your Deck Medic Business (but not utilizing the Licensed Marks) within your Operating Territory; (d) use the Licensed Marks and System to distribute the Approved Services and Products offered and sold by the Franchised Business or products and services similar to the Approved Services and Products offered and sold by the Franchised Business in alternative channels of distribution including the internet, catalog sales, telemarketing, or other direct marketing sales within or outside your Operating Territory; (e) use the Licensed Marks and System to offer, sell, and provide the Approved Services and Products offered and sold by the Franchised Business or products and services similar to the Approved Services and Products offered and sold by the Franchised Business on behalf of customers of local, regional, and/or national corporate accounts such as residential property owners, commercial property owners, and insurance companies (referred to as "Corporate Accounts") within or outside your Operating Territory; and (f) use the Licensed Marks
Source: Item 12 — TERRITORY (FDD pages 29–32)
What This Means (2024 FDD)
According to Deck Medic's 2024 Franchise Disclosure Document, Deck Medic retains the right to acquire businesses that offer similar services to a Deck Medic franchise. Specifically, Deck Medic can acquire, merge, or affiliate with businesses of any kind, including those that offer similar products and services to a Deck Medic Business. After such an acquisition, merger, or affiliation, Deck Medic has the right to own, operate, franchise, or license others to own and operate these businesses, even if they offer similar products and services to a Deck Medic franchise within a franchisee's operating territory. However, these acquired businesses cannot use Deck Medic's Licensed Marks within the franchisee's operating territory.
This reserved right means that a Deck Medic franchisee could potentially face competition from a business acquired by Deck Medic that operates within their territory, as long as that business does not use Deck Medic's trademarks. This is a significant consideration for prospective franchisees, as it introduces a potential competitive element directly controlled by the franchisor. While the acquired business cannot operate under the Deck Medic name, it can still offer similar services, potentially impacting the franchisee's market share and profitability.
It is important for potential Deck Medic franchisees to understand the implications of this reserved right. While Deck Medic is restricted from opening another Deck Medic franchise within a franchisee's territory, this restriction does not apply to businesses acquired by Deck Medic. Prospective franchisees should inquire about Deck Medic's plans for acquisitions and how the company intends to manage potential conflicts of interest between acquired businesses and existing franchisees. Understanding the scope and potential impact of this clause is crucial for making an informed investment decision.