What is Pump It Up's obligation regarding operating or licensing other Pump It Up businesses within a franchisee's Protected Area, assuming the franchisee complies with the Franchise Agreement?
Pump_It_Up Franchise · 2025 FDDAnswer from 2025 FDD Document
pproved your site and you have completed all other opening and operational obligations, you will have the right to operate a Pump It Up Business at a designated location. If you comply with the Franchise Agreement, we will not operate, or license others to operate, Pump It Up Businesses in an agreed upon geographic area ("Protected Area") during the term of the Franchise Agreement. The Protected Area will be based upon zip codes or other geographic features around the Premises, and will typically be defined either as a one-mile radius around the Premises, or more or less of a radius depending on the demographics in your area. In certain areas of the country, the Protected Area may be stated as metes and bounds around the Premises.
Notwithstanding the grant of a Protected Area, we and our affiliates reserve the right, without any compensation to you, to: (1) operate (and license others to operate) any type of business other than a Pump It Up Business at any location inside or outside the Protected Area; (2) provide, offer and sell (and license others to provide, offer and sell) products that are identical or similar to and/or competitive with those provided at or from Pump It Up Businesses, whether identified by the Marks or other trademarks or service marks, through dissimilar distribution channels (including, without limitation, the internet or similar electronic media) both inside and outside the Protected Area; (3) operate (and license others to operate) Pump It Up Businesses located anywhere outside the Protected Area; (4) acquire the assets and/or ownership interests of one or more competing entertainment centers ("Competing Businesses") and franchising, licensing or creating similar arrangements with respect to these businesses once acquired wherever these businesses (or the franchisees or licensees of these businesses) are located or operating (including in the Protected Area); (5) be acquired (whether through acquisition of assets, ownership interests or otherwise, regardless of the form of transaction) by a competitor that operates Competing Businesses, or by another business, even if such business operates, franchises and/or licenses Competing Businesses in the Protected Area; and (6) create, place, and/or distribute or authorize others to create, place and/or distribute any advertising and promotional materials, which may appear in media, or be received by prospective customers located, within the Protected Area. The grant of a Protected Area to you does not restrict the future operation of Pump It Up Businesses that are under construction or the continued operation of Pump It Up Businesses in the Protected Area. We reserve all rights in the Site Selection Area with respect to the Protected Area.
You have no options, rights of first refusal, or similar rights to acquire additional franchises from us.
You will not receive an exclusive territory.
Source: Item 12 — TERRITORY (FDD pages 41–43)
What This Means (2025 FDD)
According to Pump It Up's 2025 Franchise Disclosure Document, if a franchisee is in full compliance with the Franchise Agreement, Pump It Up will not operate or license others to operate Pump It Up Businesses in the agreed-upon Protected Area during the term of the Franchise Agreement. The Protected Area is based on zip codes or other geographic features around the Premises, typically defined as a one-mile radius, but may vary depending on the demographics of the area. In some areas, the Protected Area may be defined by metes and bounds.
However, Pump It Up and its affiliates retain significant rights even within a franchisee's Protected Area. They can operate or license others to operate any type of business other than a Pump It Up Business. They can also offer and sell products identical or similar to those at Pump It Up Businesses through different distribution channels, such as the internet, without compensating the franchisee. Pump It Up can operate or license Pump It Up Businesses outside the Protected Area and acquire competing entertainment centers, even if those businesses operate within the franchisee's Protected Area. Furthermore, Pump It Up can be acquired by a competitor that operates competing businesses, even within the Protected Area, and can create and distribute advertising that may reach customers within the Protected Area.
Pump It Up's affiliate, BounceU Holdings, is the franchisor of a competing inflatable business under the mark "BOUNCEU." BOUNCEU facilities may advertise and directly compete with Pump It Up Businesses located within the same geographic area. Pump It Up shares offices with BOUNCEU, and the management team has management responsibility for both franchise systems.
Prospective franchisees should be aware that while they are granted a Protected Area, this does not guarantee exclusive operation, as Pump It Up and its affiliates retain considerable rights to operate or license competing businesses and alternative distribution channels within that area. The presence of a competing BounceU franchise, managed by the same team, further emphasizes the limited exclusivity provided by the Protected Area.