Under what circumstances can Mr. Sandless utilize other licensees or franchisees to service a Regional Account within a franchisee's Designated Territory?
Mr_Sandless Franchise · 2025 FDDAnswer from 2025 FDD Document
- 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, Mr. Sandless has specific rights regarding Regional Accounts, which are defined as entities with responsibility for five or more businesses not confined to a single designated territory. Mr. Sandless retains the exclusive right to negotiate and enter into agreements with Regional Accounts, and franchisees must refer all potential Regional Accounts to Mr. Sandless. Franchisees are not permitted to negotiate terms directly with Regional Accounts.
If a Regional Account expresses dissatisfaction with a franchisee's services, or if the franchisee declines to provide services under the terms of the Regional Account contract, Mr. Sandless has the right to provide services to the Regional Account locations within the franchisee's designated territory directly or through another licensee or franchisee. This can occur on the terms outlined in the Regional Account bid or contract. Mr. Sandless also has the option to contract with another party to provide these services, using the Mr. Sandless Proprietary Marks or other trademarks.
It's important to note that Mr. Sandless's actions in providing services to Regional Accounts, either directly or through another party, do not constitute a violation of the franchisee's designated territory rights. The franchisee is not entitled to any compensation for work performed by others within their territory under these circumstances. This means that while a franchisee has a designated territory, Mr. Sandless retains significant control over Regional Accounts and can utilize other resources to service them if necessary, even within a franchisee's territory, without compensating the franchisee.