What rights does Desi District Franchise Group retain regarding establishing other Desi District businesses outside the franchisee's territory?
Desi_District Franchise · 2024 FDDAnswer from 2024 FDD Document
- 2.2 Protected Territory. Desi District Franchise Group shall not establish, nor license the establishment of, another business within the Territory selling the same or similar goods or services under the same or similar trademarks or service marks as a Desi District business. Desi District Franchise Group retains the right to:
- (i) establish and license others to establish and operate Desi District businesses outside the Territory, notwithstanding their proximity to the Territory or their impact on the Business;
- (ii) operate and license others to operate businesses anywhere that do not operate under the Desi District brand name; and
- (iii) sell and license othersto sell products and services in the Territory through channels of distribution (including the internet) other than Desi District outlets.
Source: Item 22 — CONTRACTS (FDD page 52)
What This Means (2024 FDD)
According to Desi District's 2024 Franchise Disclosure Document, Desi District Franchise Group retains specific rights regarding establishing other Desi District businesses outside a franchisee's protected territory. While franchisees are granted a protected territory where Desi District will not establish or license another business selling similar goods or services under the Desi District brand, this protection has limitations.
Desi District Franchise Group explicitly retains the right to establish and license others to establish and operate Desi District businesses outside the franchisee's territory, regardless of their proximity or impact on the franchisee's business. This means that a franchisee may face competition from other Desi District locations, even if those locations are nearby.
Furthermore, Desi District reserves the right to operate and license others to operate businesses anywhere that do not operate under the Desi District brand name. They can also sell and license others to sell products and services in the franchisee's territory through other channels of distribution, including the internet, as long as it's not through Desi District outlets. This could include online sales, partnerships with other businesses, or alternative distribution methods that might compete with the franchisee's business. These stipulations are important for prospective franchisees to consider, as they highlight the potential for competition from both within and outside the Desi District franchise system.