What is the 'Designated Area' for an Ella Cafe franchise?
Ella_Cafe Franchise · 2024 FDDAnswer from 2024 FDD Document
rotection of your Franchised Business.
Grant of Territory
Once the location of the Coffee House is identified, we will grant to you a territory in which you will operate your Franchised Business which will serve as the "Designated Area." If you and your affiliates are in compliance with the Franchise Agreement and any other agreement you have with us or our affiliates, except as described below, we and our affiliates will not establish or authorize anyone except you to establish an ELLA Coffee House within the Designated Area specified in the Franchise Agreement. Generally, the Designated Area will be a geographic area which is a circle having the Coffee House's front entrance as its center and a radius of 1 mile, but the Designated Area may be less. In densely populated urban areas, the Designated Area will be less and may be as small as an office or retail building in these types of areas. Your exact Designated Area will be identified in the franchise agreement. If you are granted the right to operate an ELLA Coffee House in a Reserved Area, no Designated Area will be granted for that Coffee House. You are not restricted from soliciting or accepting orders from consumers outside of your Designated Area with our prior written consent, except with respect to Reserved Areas and the channels of distribution described below, or if we limit the area in which you can provide catering services.
Franchisor's Reserved Rights
"Reserved Area" means the enclosed area of retail sales establishments, including without limitation, shopping malls, grocery stores, and retailers that are part of regional or national chains; food courts; airports; hospitals; cafeterias; commissaries; campuses of schools, colleges, and universities; hotels; office buildings; stadiums; arenas; ballparks; festivals; fairs; military bases; public transportation facilities, government facilities, and other mass gathering locations or events.
We retain all other rights in and outside the Designated Area.
Source: Item 12 — TERRITORY (FDD pages 33–35)
What This Means (2024 FDD)
According to Ella Cafe's 2024 Franchise Disclosure Document, the 'Designated Area' is the territory in which a franchisee will operate their franchised business. Once Ella Cafe approves the franchisee's chosen location, they will grant a Designated Area to the franchisee. Generally, this area is a circle with a radius of 1 mile from the front entrance of the coffee house. However, in densely populated urban areas, the Designated Area may be smaller, potentially as small as an office or retail building. The exact Designated Area will be specified in the franchise agreement.
Ella Cafe retains rights both inside and outside the Designated Area. They can operate or license others to operate Ella Cafe locations outside the Designated Area and in any Reserved Area, even those adjacent to or surrounded by the Designated Area. Reserved Areas include locations such as shopping malls, grocery stores, food courts, airports, hospitals, college campuses, hotels, office buildings, stadiums, and military bases. Ella Cafe can also advertise and promote the system within the Designated Area.
Furthermore, Ella Cafe reserves the right to operate or license other coffee houses, ghost kitchens, or food service businesses using different trademarks inside and outside the Designated Area and in any Reserved Area. They can also engage in the production, distribution, and sale of food, beverages, or other services and products under different names or marks through various methods of distribution, such as vending machines, kiosks, food trucks, grocery stores, mail order catalogs, and the Internet, regardless of the proximity to the franchisee's location or the competitive impact. Franchisees are not compensated if Ella Cafe exercises these rights. Franchisees are generally allowed to solicit and accept orders from consumers outside their Designated Area with prior written consent, except in Reserved Areas or through alternate channels of distribution, and subject to any limitations on catering services.