Can an Extreme Art Studio franchisee solicit customers outside of their Territory through the Internet?
Extreme_Art_Studio Franchise · 2024 FDDAnswer from 2024 FDD Document
You may not solicit, offer or provide services to customers outside your Territory, including by any alternative channel including the Internet, wholesale, catalog sales, telemarketing, or other direct marketing of distribution. We may allow you to promote your Extreme Art Studio Business to customers in your Territory via alternate online strategies consistent with our online policy as contained in our Franchise Operations Manual. You may offer and sell approved products and services only in the manner we have prescribed and via methods and channels we permit. You will not receive exclusive territory. You may face competition from other Extreme Art Studio Businesses located outside the Territory or from other channels of distribution or competitive brands that we or affiliates control.
Source: Item 12 — TERRITORY (FDD pages 37–39)
What This Means (2024 FDD)
According to Extreme Art Studio's 2024 Franchise Disclosure Document, franchisees are generally restricted from soliciting customers outside of their designated territory, including through online channels. The FDD specifies that franchisees "may not solicit, offer or provide services to customers outside your Territory, including by any alternative channel including the Internet, wholesale, catalog sales, telemarketing, or other direct marketing of distribution." This restriction is in place to protect the territorial rights of other franchisees and to maintain a controlled distribution strategy. However, Extreme Art Studio may allow franchisees to promote their business to customers within their territory using online strategies that align with the company's online policy as detailed in the Franchise Operations Manual.
Extreme Art Studio retains significant rights regarding territory, including the right to operate other Extreme Art Studio businesses or similar art studio businesses outside a franchisee's territory. They also reserve the right to sell products or services through alternative channels of distribution, including the Internet, without compensating the franchisee. This means that while a franchisee is restricted from actively soliciting customers outside their territory online, Extreme Art Studio itself can engage in online sales and marketing activities that may reach customers in any location.
This territorial agreement is not exclusive, meaning franchisees may face competition from other Extreme Art Studio businesses located outside their territory or from other distribution channels controlled by Extreme Art Studio. The FDD also states that purchasing a Standard 2 or Standard 3 Franchise does not guarantee additional territorial rights beyond those specified in the Franchise Agreement and Extreme Art Rider for each additional Extreme Art Studio Business. Therefore, prospective franchisees should carefully consider the limitations on their ability to solicit customers outside their territory and the potential for competition from other channels, including the Internet, when evaluating the franchise opportunity.