What constitutes 'unfair competition' by the franchisor against an Endless Summer Sweets franchisee?

According to the 2024 Endless Summer Sweets Franchise Disclosure Document, Endless Summer Sweets will not establish, nor license or franchise the establishment of, another business within the franchisee's territory selling the same or similar goods or services under the same trademarks or service marks as an Endless Summer Sweets business. This is to protect the franchisee's territory. The territory is defined in the Location Acceptance Letter.

However, Endless Summer Sweets retains the right to establish and license others to establish and operate Endless Summer Sweets businesses outside the Territory, regardless of their proximity to the Territory or their impact on the franchisee's business. They also retain the right to operate and license others to operate businesses anywhere that do not operate under the Endless Summer Sweets brand name. Additionally, Endless Summer Sweets can sell and license others to sell products and services in the Territory through channels of distribution (including the internet) other than Endless Summer Sweets outlets.

In practical terms, this means that while Endless Summer Sweets grants a protected territory, that protection is limited to businesses operating under the Endless Summer Sweets brand. Endless Summer Sweets can still engage in activities that might compete with a franchisee's business through other brands or distribution channels. A prospective franchisee should carefully consider the implications of these exceptions and how they might affect their business's potential.