Does Fitstop impose territorial restrictions on providing approved services to customers residing outside of a franchisee's designated territory?
Fitstop Franchise · 2024 FDDAnswer from 2024 FDD Document
There are no territorial restrictions from accepting and providing the Approved Services to customers/patrons that reside/work or are otherwise based outside of your Designated Territory, provided you only perform such Approved Services to the customer base from the Premises of your Franchised Business. Other System Businesses and franchisees will have these same rights. You will not be required to pay us any additional consideration for accepting clientele from those that reside outside of your Designated Territory, provided all Approved Services and revenue is generated at and from the approved Premises.
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 12 — TERRITORY (FDD pages 35–37)
What This Means (2024 FDD)
According to Fitstop's 2024 Franchise Disclosure Document, there are generally no territorial restrictions on providing approved services to customers residing or working outside of a franchisee's designated territory. A Fitstop franchisee can accept and provide services to customers who live, work, or are based outside their designated territory, as long as these services are performed from the approved premises of the franchised business. Other Fitstop franchisees have the same rights.
However, this ability to serve customers from outside the designated territory is conditional. All approved services and revenue must be generated at and from the approved premises. Fitstop franchisees cannot use alternative channels of distribution, such as the internet, catalog sales, or telemarketing, to make sales outside of their designated territory, including the sale of any approved products. Furthermore, franchisees are prohibited from actively soliciting customers outside of their designated territory without prior written consent from Fitstop.
Fitstop also retains specific rights, including 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. They can also distribute approved products and services through alternative channels, such as the internet or direct mail. These reserved rights mean that while franchisees can serve customers from outside their territory at their physical location, Fitstop can engage in broader sales and marketing activities without compensating the franchisee, even within the franchisee's territory.