Can a Dryer Vent Squad franchisee face competition from outlets owned by the franchisor?
Dryer_Vent_Squad Franchise · 2024 FDDAnswer from 2024 FDD Document
ed any options, rights of first refusal, or similar rights to acquire additional franchises.
Territory Rights
You will not receive an exclusive territory. You may face competition from other franchisees, from outlets that we own, or from other channels of distribution or competitive brands that we control. However, during the term of the Franchise Agreement, provided that you are not in default of your obligations to us or our affiliates and except as to our Reserved Rights set forth below, we will not open and operate and we will not grant another franchisee the right to open and operate a Dryer Vent Squad Business within your Operating Territory.
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 Dryer Vent Squad 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 Dryer Vent Squad 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 Dryer Vent Squad 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 large box home improvement retailers, wholesale clubs, regional and national home construction contractors (referred to as "Corporate Accounts") within or outside your Operating Territory; and (f) use the Licensed Marks and System and to license others to use the Licensed Marks and System, to engage in all other activities not expressly prohibited by the Franchise Agreement.
Corporate Accounts Program
If we establish a Corporate Accounts Program where we engage in a contract or service agreement with a Corporate Account service provider, we will offer you the opportunity to participate in the program under the guidelines and rules that we develop from time to time and subject to the pricing criteria and requirements that we establish. You will have an option to refuse to participate in Corporate Accounts Programs, but if you do, you agree that we can service the Corporate Accounts in your territory or authorize others, including other franchisees, to perform work for the Corporate Accounts. All pricing and fees charged in connection with Corporate Accounts will be at rates negotiated and determined by us.
Source: Item 12 — TERRITORY (FDD pages 36–38)
What This Means (2024 FDD)
According to Dryer Vent Squad's 2024 Franchise Disclosure Document, a franchisee may face competition from various sources. Specifically, Dryer Vent Squad franchisees may encounter competition from other franchisees, outlets that Dryer Vent Squad owns, or other channels of distribution or competitive brands that Dryer Vent Squad controls. However, Dryer Vent Squad states that, provided the franchisee is not in default of their obligations, Dryer Vent Squad will not open and operate, nor grant another franchisee the right to open and operate, a Dryer Vent Squad Business within the franchisee's Operating Territory during the term of the Franchise Agreement, except for reserved rights.
Dryer Vent Squad and its affiliates retain the exclusive right to engage in certain activities without compensating the franchisee. These reserved rights include operating and granting others the right to develop Dryer Vent Squad Businesses outside the franchisee's Operating Territory, irrespective of proximity. They also include the right to acquire, merge with, or affiliate with other businesses, even those offering similar products and services, and to continue operating or franchising those businesses, as long as they do not use the Dryer Vent Squad Licensed Marks within the franchisee's Operating Territory.
Furthermore, Dryer Vent Squad reserves the right to use Licensed Marks and the System to distribute Approved Services and Products through alternative channels like the internet, catalog sales, telemarketing, or other direct marketing sales, both within and outside the franchisee's Operating Territory. They can also use the Licensed Marks and System to offer, sell, and provide Approved Services and Products on behalf of customers of Corporate Accounts, such as large box home improvement retailers and national home construction contractors, within or outside the franchisee's territory. Dryer Vent Squad can also license others to use the Licensed Marks and System for activities not expressly prohibited by the Franchise Agreement.
Dryer Vent Squad also states that there are no restrictions on them from soliciting or accepting orders from customers inside the franchisee's territory, except as otherwise noted. Dryer Vent Squad reserves the right to use other channels of distribution, such as the internet, catalog sales, telemarketing, or other direct marketing sales, to make sales within the franchisee's territory using their principal trademarks or using trademarks different from the ones the franchisee will use under the Franchise Agreement. Dryer Vent Squad does not pay any compensation to the franchisee for soliciting or accepting orders from inside their territory.