Can Monicals Pizza establish other channels of distribution for Monicals Pizza menu items that may compete with a franchisee's restaurant?
Monicals_Pizza Franchise · 2025 FDDAnswer from 2025 FDD Document
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. The area that you will receive (called an "area of primary responsibility" or "area") will be described and depicted in a map attached to the Franchise Agreement. We determine the boundaries of the area based on a variety of factors, including population, median population age, proximity to competitors, median income characteristics, proximity to other franchisees and natural, physical or political boundaries.
We reserve the right to establish other franchised or company-owned businesses in your area under other systems using other trademarks at locations inside and outside of your area that may compete with your franchised restaurant. We also reserve the right to establish other channels of distribution for the sale of Monical's Pizza menu items, including Internet sales, catalog sales, telemarketing, or other direct marketing sales while using our principal trademark or any other of our trademarks. These activities may compete with your franchised restaurant. We will not compensate you for any sales made in your area through an alternate channel of distribution. You may not focus your marketing on customers located outside your area of primary responsibility, although you may collect e-mail addresses and cellphone numbers from guests of your restaurants for use in future e-mail or text marketing activities. Any sales you make of any products to be resold will be made only in strict compliance with the provisions of the Confidential Operations Manual. Unless you are advertising cooperatively with another franchisee, you may not advertise in any media primarily circulated within another franchisee's area of primary responsibility without our permission.
Source: Item 12 — TERRITORY (FDD pages 27–28)
What This Means (2025 FDD)
According to Monicals Pizza's 2025 Franchise Disclosure Document, franchisees do not receive an exclusive territory. Monicals Pizza retains the right to establish other channels of distribution for the sale of Monicals Pizza menu items. These channels include Internet sales, catalog sales, telemarketing, or other direct marketing sales, all while using their principal trademark or any other of their trademarks. These activities may compete with a franchisee's restaurant.
Monicals Pizza will not compensate franchisees for any sales made in their area through these alternate channels of distribution. While franchisees can collect email addresses and cellphone numbers from their restaurant guests for future marketing, they cannot focus their marketing efforts on customers outside their primary area of responsibility. Franchisees also need permission to advertise in media primarily circulated within another franchisee's area unless they are advertising cooperatively.
This lack of an exclusive territory and the reservation of alternative distribution channels are important considerations for potential Monicals Pizza franchisees. It means that Monicals Pizza can directly compete with its own franchisees through online sales or other methods, potentially impacting a franchisee's revenue. Franchisees need to be aware that their success depends on their ability to compete with both other franchisees, company-owned outlets, and Monicals Pizza's direct sales efforts.