Does the Mr. Sandless franchisee have the right to operate the franchise outside of the 'Designated Territory'?
Mr_Sandless Franchise · 2025 FDDAnswer from 2025 FDD Document
ly agree as follows:
1. FRANCHISE GRANT
We hereby grant to you, and you hereby accept, a nonexclusive franchise to establish and operate one (1) Franchised Business pursuant to the terms of this Agreement. This Agreement does not give you the right to establish additional Franchised Businesses.
2. TERRITORY AND LOCATION
2.1 Designated Territory
You shall operate your Business only within the designated territory identified, or (if the parties have not agreed upon a territory at the time this Agreement is signed) to be identified, in the Data Sheet (the "Designated Territory"). The size and configuration of your Designated Territory is defined in terms of contiguous zip codes and/or by a map attached to this Agreement as Attachment 2. This Agreement grants you the right to operate the Franchised Business within the Territory only. You acknowledges that (i) the Designated Territory was mutually agreed upon by you and us, (ii) prior to the Effective Date hereof, you conducted your own due diligence with regard to potential customers and other matters relative to the operation of the Franchised Business in the Designated Territory, and (iii) our agreement to the Designated Territory is permission only, does not constitute a representation, promise, warranty, or guarantee, express or implied, by us that the Franchised Business operated therein will be profitable or otherwise successful, and cannot, and does not, create any liability for us. You may not offer or sell any products or services offered by the Business to customers located outside of the Designated Territory. However, you may offer or sell products or services to customers located outside of and adjacent to your Designated Territory if the customer is located in an area that is not serviced by another System franchisee, and you have received prior written approval from us, which approval may be granted or denied at our sole discretion.
During the term of this Agreement, so long as you are in substantial compliance with the terms and conditions of this Agreement, we will not establish or locate, or grant any third party the right to establish or locate, another Mr. Sandless Business using the System and Proprietary Marks within the Designated Territory, except as set forth in Section 2.2 below. This Agreement does not grant you any other territorial rights. Notwithstanding the foregoing, if you meet our qualifications, you may purchase one or more additional territories of approximately 100,000 population each, not to exceed a total of four (4) territories under this Agreement. You shall pay an additional territory fee of Five Thousand Dollars ($5,000.00) for each additional territory purchased. Upon such additional purchase, we will amend Attachment 2.
2.2 Reservation of Rights and Alternative Channels of Distribution
We retain the right to establish, or to grant others the right to establish, Mr. Sandless Businesses outside the Designated Territory. You acknowledge and agree that certain of our or our affiliates' products, whether now existing or developed in the future and whether or not designated as "proprietary products", may be distributed in the Designated Territory by us, our affiliates, our franchisees, licensees or designees, in such manner and through such channels of distribution as we, in our sole discretion, shall determine. Such alternative channels of distribution shall include, but are not limited to, sales of any products offered hereunder or other products using the Proprietary Marks or using other marks or private labeling at or through home improvement stores, home shows, the internet (including orders via our Website), mail order or other distributions methods or supply chains. We reserve the right, among others, as to any distribution arrangements relating thereto.
Source: Item 22 — CONTRACTS (FDD page 42)
What This Means (2025 FDD)
According to Mr. Sandless's 2025 Franchise Disclosure Document, franchisees are generally restricted to operating within their designated territory. The franchise agreement grants the right to operate the franchised business only within the agreed-upon territory, which is defined by contiguous zip codes or a map attached to the agreement. The franchisee acknowledges that the territory was mutually agreed upon and that Mr. Sandless's agreement to the designated territory does not guarantee profitability or success.
However, there are limited exceptions where a Mr. Sandless franchisee may offer or sell products or services to customers outside their designated territory. This is permissible if the customer is located in an adjacent area not serviced by another franchisee and if the franchisee obtains prior written approval from Mr. Sandless, which can be granted or denied at their sole discretion. This provides some flexibility for franchisees to expand their reach in areas where there is no existing Mr. Sandless presence, but it requires franchisor approval.
The Mr. Sandless agreement also states that franchisees are not permitted to solicit customers or advertise outside their designated territory without prior written approval from Mr. Sandless. Unauthorized marketing outside the territory can result in a fine of $500 per occurrence. However, the agreement recognizes that certain advertising methods, like radio and television, may reach a broader audience, and this is not considered a violation if other franchisees have the opportunity to participate in the advertising. This clause aims to balance territorial protection with practical advertising considerations.
Mr. Sandless retains the right to establish other Mr. Sandless businesses outside the franchisee's designated territory. The agreement also clarifies that Mr. Sandless or its affiliates may distribute products within the designated territory through alternative channels such as home improvement stores or the internet. The franchisee does not have the right to distribute products through these alternative channels or share in any proceeds from such sales. However, Mr. Sandless will not sell the Mr. Sandless services in a "do it yourself" kit by any means which bypasses the franchise System.