Can a Fitstop franchisee solicit customers outside of their Designated Territory without approval?
Fitstop Franchise · 2024 FDDAnswer from 2024 FDD Document
You may not use alternative channels of distribution, such as the internet, catalog sales, telemarketing or other direct marketing, to make any sales outside of your Designated Territory (including the sale of any Approved Products). You are also prohibited from actively soliciting customers outside of your Designated Territory without our prior written consent. We are not required to pay you any compensation for soliciting or accepting orders inside your Designated Territory. Your Franchise Agreement does not provide you with any right of first refusal, option or any other rights to acquire additional franchises.
Source: Item 16 — RESTRICTIONS ON WHAT THE FRANCHISEE MAY SELL (FDD pages 41–42)
What This Means (2024 FDD)
According to Fitstop's 2024 Franchise Disclosure Document, franchisees are generally prohibited from actively soliciting customers outside of their Designated Territory without prior written consent from Fitstop. However, franchisees are allowed to accept and provide services to customers who reside or work outside of their Designated Territory, as long as these services are performed at the approved premises of the franchised business.
This means a Fitstop franchisee can serve customers from anywhere, but they cannot actively market or solicit business outside their designated area without getting permission. This restriction aims to protect the territorial rights of other franchisees and maintain an orderly marketing approach. Fitstop retains the right to market and sell products and services similar to those offered by franchisees under different trademarks, both within and outside the Designated Territory.
Fitstop also reserves the right to use the trademarks and system to distribute approved products and services through alternative channels, such as the internet, direct mail, and wholesale stores, regardless of the franchisee's Designated Territory. This reservation of rights allows Fitstop to adapt to changing market conditions and explore new distribution methods without being restricted by individual franchise agreements. Franchisees do not have rights to compensation for orders solicited or accepted inside their territory.
In practice, this means that while a Fitstop franchisee can serve customers who find them organically or through national marketing efforts, they cannot engage in targeted advertising or direct outreach to customers outside their Designated Territory without express approval. This policy is common in franchising to balance the need for brand consistency and market coverage with the individual franchisee's investment and territorial expectations.