How is the Territory for an Extreme Art Studio franchise defined?
Extreme_Art_Studio Franchise · 2024 FDDAnswer from 2024 FDD Document
[Item 12: TERRITORY]
When you sign the Franchise Agreement or Extreme Art Rider, we will grant you a territory based on the geographic area and population density within that territory and other relevant demographic characteristics ("Territory"). The scope of the area will likely differ among franchisees. The Territory will be defined by an approximate four-mile radius surrounding the specific site location of your Extreme Art Studio Business. Once we establish your Territory, we will not change or modify it without your consent. You may only advertise, solicit, offer or provide services to customers of your Extreme Art Studio Business within your Territory. Currently, neither we nor any affiliate of ours intends to operate or franchise another business under a different trademark that sells products or services similar to the products or services offered at Extreme Art Studio Businesses, but we reserve the right to do so in the future. You must operate the Extreme Art Studio Business in the Territory. You may not relocate your Extreme Art Studio Business without our approval. Our approval will be based on our then-current standards for demographics and location requirements such as traffic, suitability, and competition as well as those for build out, design, floorplan and décor. During the term of your Franchise Agreement, except as provided below, we will not establish or operate, or franchise any entity to establish or operate, a business using the Marks and System at any location within the Territory. Kidcreate Franchises offer the same curriculum under the Modules. If there is a Kidcreate Franchise in your Territory, they may offer identical curriculum under the Modules that you will offer under the Modules.
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.
- (8) the right for our affiliate to sell Kidcreate Studio businesses in the Territory included those that offer the Modules that your Extreme Art Business may offer.
You do not receive the right to acquire additional Extreme Art Studio Businesses unless you have purchased a Standard 2 or Standard 3 Franchise. If you wish to purchase an additional Extreme Art Franchise (and have not purchased a Standard 2 or Standard 3 Franchise), you must apply for each additional Extreme Art Business. We consider a variety of factors when determining whether to grant additional Extreme Art Businesses. Among the factors we consider, in addition to the then-current requirements for new Extreme Art franchisees, are whether or not the franchisee is in compliance with the requirements under their current franchise agreement.
Your rights in the Territory and the continuation of your Franchise do not depend on your achieving a certain sales volume, market penetration, or other contingency, and there are no other circumstances that permit us to modify your rights in the Territory during the term of the Franchise Agreement.
We and our affiliates retain all territory rights not expressly granted to you. These rights include:
- (1) the right to establish and operate, and allow others to establish and operate, other Extreme Art Businesses and other art studio businesses using the Marks and the System, holding classes or activities at any location outside the Territory of your Extreme Art Studio Businesses and on such terms and conditions we deem appropriate;
Source: Item 12 — TERRITORY (FDD pages 37–39)
What This Means (2024 FDD)
According to the 2024 Extreme Art Studio Franchise Disclosure Document, the territory granted to a franchisee is based on the geographic area, population density, and other relevant demographic characteristics. This territory is typically defined by an approximate four-mile radius surrounding the specific site location of the Extreme Art Studio Business. Once established, this territory will not be changed or modified without the franchisee's consent. Franchisees are required to operate their Extreme Art Studio Business within this defined territory and must obtain approval from Extreme Art Studio before relocating. This approval is based on the franchisor's standards for demographics, location requirements (such as traffic and competition), and build-out specifications.
While franchisees are generally restricted from soliciting or providing services to customers outside their territory, including through online channels, Extreme Art Studio may allow franchisees to promote their business to customers within their territory using approved online strategies. However, franchisees should be aware that they will not receive an exclusive territory and may face competition from other Extreme Art Studio businesses located outside their territory, as well as from other distribution channels or competitive brands controlled by Extreme Art Studio or its affiliates. Extreme Art Studio retains significant rights, including the right to establish other Extreme Art Studio businesses or similar businesses under different trademarks outside the franchisee's territory. They also reserve the right to sell products and services through alternative channels of distribution, such as the internet or wholesale, within or outside the territory.
It is important to note that the rights granted to the franchisee in their territory do not depend on achieving specific sales volumes or market penetration. Extreme Art Studio also retains the right for its affiliate to sell Kidcreate Studio businesses in the territory, even if those businesses offer modules identical to those offered by the Extreme Art Studio franchise. Furthermore, franchisees do not receive the right to acquire additional Extreme Art Studio businesses unless they have purchased a Standard 2 or Standard 3 Franchise. If a franchisee wishes to purchase an additional Extreme Art Studio franchise without having purchased a Standard 2 or Standard 3 Franchise, they must apply for each additional business, and Extreme Art Studio will consider various factors, including compliance with the current franchise agreement.