Is Hawaiian Bros Island Grill or its affiliates restricted from distributing branded merchandise through commercial establishments not affiliated with the system, inside or outside a franchisee's territory?
Hawaiian_Bros_Island_Grill Franchise · 2025 FDDAnswer from 2025 FDD Document
- (d) Nothing contained in this Section 4 will prohibit or restrict Company, its Affiliates or its licensees from engaging in the distribution of proprietary sauces, shirts or other memorabilia, food or merchandise, whether or not identified by or associated with the Hawaiian Bros Island Grill brand name or logo, to or through commercial establishments that are not affiliated with Company or associated with the System, including (for example) department stores or supermarkets. Company and its Affiliates may exercise their distribution rights, both inside and outside the Territory.
- (e) Nothing contained in this Section 4 will prohibit or restrict Company, its Affiliates or its licensees from selling proprietary sauces, shirts or other memorabilia, food or merchandise to customers inside the Territory through catalogues, telemarketing campaigns, an Internet Website and other directorder techniques. Company, its Affiliates or its licensees may distribute sales solicitation materials in the Territory and broadcast television and radio commercials for direct-order merchandise into the Territory, without being deemed to infringe Franchisee's competitive protection rights.
- (f) Franchisee acknowledges and agrees that Company has no express obligation or implied duty to insulate or protect Franchisee's revenues from erosion as the result of competition that is not prohibited by this Section 4. Franchisee expressly waives and relinquishes any right to assert any claim against Company based on the actual or arguable existence of any such obligation or duty.
Source: Item 23 — RECEIPTS (FDD pages 77–262)
What This Means (2025 FDD)
According to the 2025 FDD, Hawaiian Bros Island Grill and its affiliates face no restrictions on distributing branded merchandise through commercial establishments that are not part of the Hawaiian Bros Island Grill system. This includes establishments like department stores or supermarkets, both within and outside a franchisee's designated territory.
This policy means that a Hawaiian Bros Island Grill franchisee's territory does not protect them from the franchisor's or its affiliates' distribution of branded merchandise through other retail channels. These channels could include department stores or supermarkets. This unrestricted distribution could potentially impact a franchisee's sales of merchandise within their territory, as customers might find the same items elsewhere.
Furthermore, Hawaiian Bros Island Grill and its affiliates can sell proprietary items like sauces, shirts, and memorabilia directly to customers within the franchisee's territory through methods like catalogs, telemarketing, and websites. The franchisee has no competitive protection against these direct sales, and Hawaiian Bros Island Grill has no obligation to protect the franchisee's revenue from competition not explicitly prohibited in the franchise agreement. Franchisees waive any claims against Hawaiian Bros Island Grill related to potential revenue erosion from such competition.