What are some examples of the 'Proprietary Marks' that Fitstop will not operate under within a franchisee's territory?
Fitstop Franchise · 2024 FDDAnswer from 2024 FDD Document
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Reserved Rights
We reserve all rights not expressly granted to you. These include the right to: (i) establish and operate, and license any third party the right to establish and operate, other Franchised Businesses using the Marks and System at any location outside of your Designated Territory; (ii) market, offer and sell products and services that are similar to the Approved Products and Approved Services offered by the Franchised Business under a different trademark or trademarks at any location, within or outside the Designated Territory; (iii) use the Marks and System, other such marks we designate, to distribute our Approved Products and/or Approved Services (including private label products that we may develop in the future) in any alternative or dissimilar channels of distribution, within or outside the Designated Territory (including by electronic means, such as the internet and by websites we establish, direct mail, wholesale stores, etc.); (iv) engage in any transaction, including to purchase or be purchased by, to merge or combine with, to convert to the System or be converted into a new system with any business, including such businesses operated by competitors or otherwise operated independently or as part of, or in association with, any other system or chain, whether franchised or corporately owned and whether located inside or outside of the Designated Territory, provided that in such situations the newly acquired businesses may not operate under the Proprietary Marks in the Designated Territory; and (v) use the Proprietary Marks and System, and license others to use the Proprietary Marks and System, to engage in any other activities not expressly prohibited in your Franchise Agreement.
We also reserve the right to open and operate and/or license others the right to operate a System Business under the Proprietary Marks from a captive venue or other non-traditional location, including by way of example, academic institutions, military bases, "big box" gyms, hotels and/or airports (each, a "Non-Traditional Venue").
Your Franchise Agreement does not grant you any right to (a) engage in any of the activities outlined in the preceding paragraph, or (b) share in any of the proceeds received by us, our affiliates or any third party from these activities, unless we otherwise agree in writing. We have no obligation to provide you with any compensation for soliciting or accepting orders inside your territory.
Source: Item 12 — TERRITORY (FDD pages 35–37)
What This Means (2024 FDD)
According to Fitstop's 2024 Franchise Disclosure Document, Fitstop retains specific rights regarding the use of its 'Proprietary Marks' within a franchisee's designated territory. These reserved rights allow Fitstop to engage in certain activities that might seem competitive but are explicitly permitted under the franchise agreement. Specifically, Fitstop can engage in transactions with other businesses, including competitors, where the acquired businesses may not operate under Fitstop's proprietary marks within the franchisee's designated territory. This means that while Fitstop can acquire or merge with a competing business, that business would need to operate under a different brand name within the Fitstop franchisee's territory. This protects the franchisee from direct competition using the Fitstop brand.
Additionally, Fitstop reserves the right to operate System Businesses under the Proprietary Marks from Non-Traditional Venues such as academic institutions, military bases, "big box" gyms, hotels and/or airports, even if these are located within a franchisee's designated territory. This means a Fitstop franchisee's territory is not exclusive, and they may face competition from company-owned or other System franchisees operating in these non-traditional venues. This is a crucial point for potential franchisees to consider, as it directly impacts the exclusivity of their territory and potential market share.
Fitstop also retains the right to market and sell similar products and services under different trademarks within or outside the designated territory. They can also distribute approved products and services through alternative channels, such as the internet or wholesale stores, using the Fitstop marks or other marks they designate. These activities can occur within or outside the franchisee's territory. This broad reservation of rights highlights that a Fitstop franchisee's territory is not entirely exclusive, and Fitstop retains significant control over brand usage and distribution channels, which could impact the franchisee's business operations and revenue potential.