Is a Mr. Sandless franchisee required to refer all potential Regional Accounts to the franchisor?
Mr_Sandless Franchise · 2025 FDDAnswer from 2025 FDD Document
The term "Regional Account" means any entity, customer, contract, or business which on its own behalf or through agents, franchisees or other third parties owns, manages, controls or otherwise has responsibility for five (5) or more businesses and whose presence is not confined within any one particular designated territory. Any dispute as to whether a particular customer is a Regional Account shall be determined by us in our sole discretion and our determination shall be final and binding.
Source: Item 22 — CONTRACTS (FDD page 42)
What This Means (2025 FDD)
According to Mr. Sandless's 2025 Franchise Disclosure Document, a franchisee's obligations regarding regional accounts are defined. A "Regional Account" is 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 disagreement about whether a customer qualifies as a Regional Account will be resolved by Mr. Sandless, and their decision is considered final and binding.
This definition is important for prospective franchisees because it clarifies that Mr. Sandless retains control over larger, multi-location accounts. This means a franchisee might encounter a situation where a customer they've been working with is reclassified as a Regional Account, and the franchisor would then handle that account directly. This could impact the franchisee's revenue if they were expecting to service that account within their territory.
While the FDD defines what constitutes a Regional Account and states that Mr. Sandless has the final say in any disputes, it does not explicitly state that franchisees are required to refer potential Regional Accounts to the franchisor. Franchisees should seek clarification from Mr. Sandless regarding the specific procedures for handling potential Regional Accounts, including whether they are obligated to report these leads and what compensation, if any, they would receive for identifying such opportunities.