Can Ledgers use the Internet to solicit customers within a franchisee's territory without compensating the franchisee?
Ledgers Franchise · 2025 FDDAnswer from 2025 FDD Document
Minimum Requirements, then we reserve the right to establish a company-owned outlet selling the same or similar goods or services under the same or similar trademarks or service Marks.
We, our parent, and our affiliates reserve all rights not expressly granted in the Franchise Agreement. For example, we, our parent, and our affiliates have the right to:
- (a) use other channels of distribution, such as the Internet, catalog sales, telemarketing, or other direct marketing sales, to solicit or accept customers within your Territory using our principal trademarks (or another trademark) without any compensation to you, except that we will normally direct inquiries for services from within your Territory to your Franchised Business
- (b) to implement cross-territorial protocols and other guidelines applicable to such situations as group advertising buys by multiple franchisees which may extend into multiple territories,
solicitation of orders of individuals who may reside in one Territory, yet work in another, and other cross-territorial situations;
- (c) to establish and operate, and grant rights to others to establish and operate a Franchised Businesses or similar businesses at any locations outside of the Territory and on any terms and conditions we deem appropriate;
- (d) to own, develop, acquire, be acquired by, merge with, or otherwise engage in any transaction with another businesses (competitive or not), which may offer products and services like your Franchised Business and may have one or more competing outlets within your Territory, however, we will not convert any acquired business in your Territory to a franchise using our primary trademarks during the Term of your Franchise Agreement.
- (e) to operate or franchise a business under a different trademark which such business sells or will sell goods or services like those you will offer, anywhere;
- (f) to negotiate purchase agreements with vendors and suppliers which we reasonably believe are for the benefit of our franchisees;
- (g) to engage in any other business activities not expressly prohibited by the Franchise Agreement, anywhere.
Source: Item 12 — TERRITORY (FDD pages 32–34)
What This Means (2025 FDD)
According to Ledgers's 2025 Franchise Disclosure Document, Ledgers, its parent, and affiliates reserve the right to use various channels, including the Internet, to solicit customers within a franchisee's territory without providing compensation. However, Ledgers states that they will normally direct inquiries for services originating from within a franchisee's territory to that franchisee's business. This means that while Ledgers retains the right to market and solicit business online within a franchisee's territory, they typically pass on leads generated from that territory to the local franchisee.
This policy has significant implications for prospective franchisees. While franchisees benefit from brand recognition and national marketing efforts, they may not directly profit from all online sales or leads generated within their territory. The exception that Ledgers will normally direct inquiries from within the territory to the franchisee provides some reassurance, but the term "normally" leaves room for interpretation and is not a guarantee.
It is also important to note that franchisees themselves are restricted in soliciting orders from consumers outside their territory, including through online channels, although they may engage in internet and social media marketing pursuant to Ledgers' guidelines, even if such marketing extends outside their territory. This creates a balance where Ledgers retains broad rights to online marketing, while franchisees have more limited, territory-focused online activities. Prospective franchisees should seek clarification from Ledgers regarding the specific guidelines and protocols governing online lead generation and distribution to fully understand how these policies will impact their business.
Furthermore, Ledgers' affiliate, ATAX, operates company outlets and offers franchises for similar services and may solicit or accept orders from within a Ledgers franchisee's territory. While Ledgers and ATAX typically target different client bases, the overlap in services means that ATAX could potentially compete for customers within a Ledgers franchisee's territory. This highlights the importance of understanding the competitive landscape and potential for internal competition within the Ledgers and ATAX network.