Is a Mr. Sandless franchisee permitted to negotiate terms with any Regional Account?
Mr_Sandless Franchise · 2025 FDDAnswer from 2025 FDD Document
- 2.3.1 We shall have the exclusive right, unless otherwise specifically delegated in writing, on behalf of us, you, and/or other franchisees utilizing the Proprietary Marks, to negotiate and enter into agreements or approve forms of agreement to provide services to Regional Accounts, licensees or franchisees, including locations within the Designated Territory. You must refer all potential Regional Accounts to us. You are not permitted to negotiate terms with any Regional Account.
- 2.3.2 Following the execution of a contract with or the acceptance of a bid by a Regional Account which contemplates the provision of services to one or more Regional Account locations within the Designated Territory, you have the option to perform such services pursuant to the terms and conditions of the Regional Account contract or on such terms and conditions as we in our discretion determine.
- 2.3.3 If the Regional Account determines not to use your services, if you elect not to provide services to a Regional Account in conformity with the terms and conditions of the Regional Account bid or contract, or if the Regional Account is not satisfied with your work, we shall have the right, exercisable in our sole discretion, to:
- (i) provide, directly or through any other licensee or franchisee utilizing the Proprietary Marks, services to the Regional Account location(s) within the Designated Territory on the terms and conditions contained in the Regional Account bid or contract; and/or
- (ii) contract with another party to provide such services to the Regional Account location(s) within the Designated Territory on the terms and conditions contained in the Regional Account bid or contract between us and the Regional Account, utilizing the Proprietary Marks or any other trademarks, service marks or trade names.
- 2.3.4 Neither the direct provision by us (or a franchisee, licensee, or agent of ours) of services to Regional Accounts as authorized in Section 2.3.3(i) above, nor our contracting with another party to provide such services as authorized in 2.3.3(ii) above, shall constitute a violation of Section 2.1 of this Agreement relating to the Designated Territory, even if such services are delivered from a location within the Designated Territory. You surrender any compensation or consideration for work performed by others in the Designated Territory pursuant to this section.
Source: Item 22 — CONTRACTS (FDD page 42)
What This Means (2025 FDD)
According to Mr. Sandless's 2025 Franchise Disclosure Document, franchisees are explicitly prohibited from negotiating terms with Regional Accounts unless specifically delegated to do so in writing by Mr. Sandless. A "Regional Account" is defined as any entity that manages or controls five or more businesses, either directly or through agents, franchisees, or other third parties, and whose business locations are not confined to a single designated territory. Any dispute over whether a customer qualifies as a Regional Account will be determined solely by Mr. Sandless, and that determination is final.
Mr. Sandless retains the exclusive right to negotiate and enter into agreements with Regional Accounts on behalf of the franchisee, Mr. Sandless itself, and other franchisees utilizing the Proprietary Marks, unless this right is specifically delegated in writing. Franchisees are required to refer all potential Regional Accounts to Mr. Sandless. However, after Mr. Sandless executes a contract with a Regional Account for services within the franchisee's Designated Territory, the franchisee has the option to perform those services under the terms of the Regional Account contract or under terms determined by Mr. Sandless.
If the Regional Account chooses not to use the franchisee's services, if the franchisee declines to provide services under the Regional Account's terms, or if the Regional Account is dissatisfied with the franchisee's work, Mr. Sandless has the right to provide those services directly or through another franchisee or licensee. This provision does not violate the franchisee's Designated Territory rights, even if the services are delivered from within that territory, and the franchisee is not entitled to compensation for work performed by others under these circumstances. This arrangement gives Mr. Sandless significant control over large accounts, ensuring consistency and potentially leveraging better deals, but it also means the franchisee's revenue from these accounts is dependent on Mr. Sandless's decisions and the franchisee's ability to meet the Regional Account's requirements.
This structure is not uncommon in franchising, as it allows the franchisor to maintain quality control and consistency across multiple locations of a large client. However, it is crucial for a prospective Mr. Sandless franchisee to understand that they will not have the autonomy to negotiate directly with Regional Accounts and that their involvement is contingent on Mr. Sandless's approval and the Regional Account's satisfaction.