What rights does Face Foundrie retain regarding the System, even after granting a franchise?
Face_Foundrie Franchise · 2025 FDDAnswer from 2025 FDD Document
2.03 Reservation of Rights. Notwithstanding anything to the contrary set forth herein, Franchisor retains the right, in its sole discretion, to:
(a) establish and operate, and grant to other franchisees or licensees the right to establish and operate, a Face Foundrié Facial Bar or any other business using the Marks, the System or any variation of the Marks and the System, (i) in any location outside the Protected Territory or (ii) as contemplated by Section 2.02 above; in each case on any terms and conditions that Franchisor deems appropriate;
(b) develop, use and franchise anywhere (including within the Protected Territory) the rights to any trade names, trademarks, service marks, commercial symbols, logos, emblems, signs, slogans, insignia, patents or copyrights not designated by Franchisor as Marks, for use with similar or different franchise systems for the sale of similar or different products or services than those constituting a part of the System, without granting Franchisee any rights therein;
(c) own, operate, franchise or license anywhere businesses offering products and services of any other type whatsoever operating under marks other than the Marks; and
(d) offer, distribute, sell and provide products or services identified by the Marks or other trademarks, service marks, commercial symbols or emblems to customers located in the Protected Territory through any distribution channel or method, including through the Internet or worldwide web (or any other existing or future form of electronic commerce), through smart phone or other digital applications, mail order or catalogs, through telemarketing or other direct marketing, through mass merchandise, convenience stores, supermarkets, grocery stores, convenience stores, and club stores; provided, however, that any such sales will not be made from a Face Foundrié Facial Bar located in the Protected Territory.
Source: Item 22 — CONTRACTS (FDD pages 73–74)
What This Means (2025 FDD)
According to Face Foundrie's 2025 Franchise Disclosure Document, Face Foundrie retains several rights regarding the System, even after granting a franchise. Face Foundrie has the right to establish and operate, or grant to other franchisees or licensees the right to establish and operate, a Face Foundrié Facial Bar or any other business using the Marks, the System or any variation of the Marks and the System, in any location outside the Protected Territory or as contemplated by Section 2.02. These activities can be conducted on any terms and conditions that Face Foundrie deems appropriate.
Face Foundrie also retains the right to develop, use, and franchise anywhere, including within the Protected Territory, any trade names, trademarks, service marks, commercial symbols, logos, emblems, signs, slogans, insignia, patents, or copyrights not designated as Marks, for use with similar or different franchise systems for the sale of similar or different products or services than those constituting a part of the System, without granting the franchisee any rights therein. Additionally, Face Foundrie can own, operate, franchise, or license businesses offering products and services of any other type whatsoever operating under marks other than the Marks, anywhere.
Furthermore, Face Foundrie retains the right to offer, distribute, sell, and provide products or services identified by the Marks or other trademarks, service marks, commercial symbols, or emblems to customers located in the Protected Territory through any distribution channel or method. This includes through the Internet or worldwide web, smart phone or other digital applications, mail order or catalogs, telemarketing or other direct marketing, through mass merchandise, convenience stores, supermarkets, grocery stores, convenience stores, and club stores. However, such sales will not be made from a Face Foundrié Facial Bar located in the Protected Territory.
These stipulations mean that while a franchisee is granted rights to operate within a Protected Territory, Face Foundrie maintains significant control and avenues for business operation and expansion, both inside and outside the franchisee's territory. This could potentially impact a franchisee's market share and revenue, especially with the rise of e-commerce and alternative distribution channels. Prospective franchisees should carefully consider these retained rights and their potential impact on their business when evaluating the franchise opportunity.