Can Extreme Art Studio advertise to customers located outside the territory of an Extreme Art Studio franchisee?
Extreme_Art_Studio Franchise · 2024 FDDAnswer from 2024 FDD Document
1.6.7 the right to advertise, solicit, accept orders and offer and sell products and services to customers located outside the Territory of your Extreme Art Studio Businesses, including via the System Website, and the right to allow other Extreme Art Studio Businesses to do the same;
1.6.8 the right to use and license the use of technology to non-franchisee locations inside and outside the Territory; and
1.6.9 the right to engage in all other activities not expressly prohibited by this Franchise Agreement.
We are not required to pay you if we exercise any of the rights specified above inside or outside your Territory including for our soliciting or accepting orders or for other franchisees soliciting or accepting orders. You agree that you may face competition from us, from other franchisees and from other channels of distribution or competitive brands that we control within the Territory.
Source: Item 22 — CONTRACTS (FDD page 49)
What This Means (2024 FDD)
According to the 2024 Extreme Art Studio Franchise Disclosure Document, Extreme Art Studio retains the right to advertise to customers outside of a franchisee's territory. Specifically, Extreme Art Studio can solicit orders and offer products and services to customers located outside of a franchisee's territory. This includes advertising via the System Website, and Extreme Art Studio also has the right to allow other Extreme Art Studio Businesses to do the same.
This means that while an Extreme Art Studio franchisee is granted a specific territory, Extreme Art Studio itself is not restricted from marketing to potential customers who reside outside of that territory. This could lead to increased competition for customers, as the franchisor and other franchisees can also target the same customer base, potentially impacting the franchisee's revenue.
This right extends to Extreme Art Studio's ability to use technology to reach customers both inside and outside of a franchisee's territory. Extreme Art Studio is not obligated to compensate franchisees when exercising these rights, even if it results in the franchisor or other franchisees soliciting or accepting orders within the franchisee's territory. Therefore, a franchisee may face competition from Extreme Art Studio, other franchisees, and other distribution channels controlled by Extreme Art Studio within their own territory.