Does the competitive protection for Hawaiian Bros Island Grill franchisees apply to Special Outlets?
Hawaiian_Bros_Island_Grill Franchise · 2025 FDDAnswer from 2025 FDD Document
ademarks and brand names other than the Marks, whether located or operating inside or outside the Territory, even if such restaurants, other retail establishments, and distribution channels offer and sell the same products and services as the Franchised Restaurant.
- (b) Company will not open or authorize anyone except Franchisee to operate a Hawaiian Bros Restaurant from a physical premises located in the Territory. However, this protection will not apply to, and Franchisee will have no competitive protection from, (i) Special Outlets that Company or another
franchisee or licensee (with Company's authorization) operates, either permanently, temporarily or seasonally, and (ii) any other Hawaiian Bros Restaurant owned or operated by Franchisee or its Affiliate(s) in the Territory at any time during the Term of this Agreement, notwithstanding any future change to the owner or operator of such Hawaiian Bros Restaurant.
Source: Item 23 — RECEIPTS (FDD pages 77–262)
What This Means (2025 FDD)
According to the 2025 Hawaiian Bros Island Grill FDD, franchisees do not receive competitive protection against Special Outlets. Hawaiian Bros Island Grill grants franchisees protection against some forms of competition inside their territory, but this protection does not extend to Special Outlets, Non-Traditional Venues, or other establishments outside the territory's physical boundaries. This means that Hawaiian Bros Island Grill can operate or authorize others to operate Special Outlets, even within a franchisee's territory, without violating the franchise agreement.
A "Special Outlet" is defined as a ghost kitchen, kiosk, food truck, temporary booth, or similar installation operating under the Hawaiian Bros Island Grill name, potentially offering the same products and services as a traditional restaurant. This definition also includes mobile dispensing units but excludes vehicles used for catering or delivery services.
This lack of competitive protection regarding Special Outlets is a significant consideration for potential franchisees. While franchisees are granted a specific territory, Hawaiian Bros Island Grill retains the right to operate alternative outlets within that territory, which could impact the franchisee's revenue. Prospective franchisees should carefully evaluate the potential impact of Special Outlets on their investment and revenue projections.