Can Devon Creek use customer data collected by a franchisee without compensating the franchisee?
Devon_Creek Franchise · 2024 FDDAnswer from 2024 FDD Document
Franchisor further specifically reserves the right to solicit, sell to, negotiated rates with, and service customers that conduct business across multiple areas or have multiple locations or properties either regionally or nationally, such as real estate brokerage firms, property management firms, residential investors, and real estate developers ("National Accounts").
Franchisor may offer Franchisee the right to service National Accounts in the Territory, provided that Franchisee accept negotiated terms; otherwise, Franchisor may service the National Accounts either directly or permit another franchisee to provide such service.
Franchisee will receive no compensation for Franchisor's sales through Alternate Distribution Channels or declined National Accounts made within the Territory.
Source: Item 22 — CONTRACTS (FDD page 45)
What This Means (2024 FDD)
According to Devon Creek's 2024 Franchise Disclosure Document, the franchisor reserves specific rights regarding customer relationships, particularly with National Accounts and through Alternate Channels of Distribution. Devon Creek may solicit, sell to, negotiate rates with, and service customers that conduct business across multiple areas or have multiple locations or properties either regionally or nationally, such as real estate brokerage firms, property management firms, residential investors, and real estate developers, defined as "National Accounts."
Devon Creek may offer the franchisee the right to service National Accounts within their territory, but the franchisee must accept negotiated terms. If the franchisee declines, Devon Creek retains the right to service these National Accounts directly or through another franchisee. Critically, the franchisee will not receive any compensation for Devon Creek's sales through Alternate Distribution Channels or declined National Accounts made within the Territory.
This means that while a franchisee may develop customer relationships, Devon Creek retains significant control over National Accounts and Alternate Distribution Channels. If Devon Creek chooses to service these customers directly or through other channels, the franchisee will not be compensated, even if these customers are within the franchisee's territory. This could impact a franchisee's potential revenue and profitability, as Devon Creek can leverage these channels without directly benefiting the franchisee who may have initially contributed to developing those customer relationships.