What are the conditions under which Ledgers may approve relocation of the Franchised Business as described in Item 12, and how does this relate to the initial territory definition?
Ledgers Franchise · 2025 FDDAnswer from 2025 FDD Document
greement. A territory will normally include a minimum population of approximately 65,000 residents as determined by the U.S. Census Bureau or mapping software that we feel is reliable.
We may approve relocation of the Franchised Business if we feel that conditions have changed such that a relocation represents a sound business decision.
We may grant to you approval to open additional outlet within your Territory if circumstances so permit, such as within other businesses with whom we have formed a relation, or if there is a population increase. We may grant you additional franchise territories if we feel you have the time, energy, capital, and management structure to be able to successfully open and operate another territory.
We do not grant you options, rights of first refusal, or similar rights to acquire additional franchises.
You will not receive an exclusive territory. You may face competition from other franchisees, from outlets that we own, or from other channels of distribution or competitive brands that we control. However, you will receive a protected territory, meaning a geographical area within which we promise not to establish a company owned or franchised Ledgers location.
What This Means (2025 FDD)
According to Ledgers's 2025 Franchise Disclosure Document, the franchisor may approve relocation of the Franchised Business if they feel that conditions have changed such that a relocation represents a sound business decision. The initial territory is defined by Ledgers as a specific geographic region, typically including a minimum population of approximately 65,000 residents. This territory is defined by zip codes, natural, or political boundaries as set forth in Schedule 1 to the Franchise Agreement.
This means that while Ledgers franchisees do not receive an exclusive territory, they do receive a protected territory, meaning a geographical area within which Ledgers promises not to establish a company-owned or franchised Ledgers location. However, franchisees may face competition from other franchisees, from outlets that Ledgers owns, or from other channels of distribution or competitive brands that Ledgers controls.
Relocation approval is at the discretion of Ledgers, based on their assessment of whether the relocation is a sound business decision. This could be influenced by factors such as changes in the demographic makeup of the initial territory, shifts in local economic conditions, or increased competition. The initial territory definition, with its population threshold, serves as a baseline for evaluating the potential success of the franchise, and any proposed relocation would likely be assessed against similar criteria to ensure continued viability.
It is important to note that continuation of territorial rights depends on achieving a certain sales growth. Franchisees cannot have declining revenue during two consecutive years. If a franchisee fails to meet these minimum requirements, Ledgers reserves the right to establish a company-owned outlet in the territory. This underscores the importance of maintaining a successful business operation within the defined territory to retain territorial rights.