Does termination of the Pump It Up franchise agreement affect the franchisee's exclusive rights?
Pump_It_Up Franchise · 2025 FDDAnswer from 2025 FDD Document
(1) The limited exclusive rights granted to you in the Protected Area immediately will terminate, and we will have the right to operate, or license others to operate, Pump It Up Businesses anywhere in the Protected Area;
(2) You and your owners must continue to abide by the covenants in Section 18;
(3) Within 15 days, you must pay to us and our affiliates all sums due and owing to us and our affiliates;
(4) You must immediately discontinue all use of the Marks in any manner, including in connection with the Franchised Business; remove the Marks from the Franchised Business, the inflatables and from clothing, signs, materials, motor vehicles and any other items owned or used by you in the operation of the Franchised Business; cancel all advertising for the Franchised Business that contains the Marks; and take such action as may be necessary to cancel any filings or registrations for the Franchised Business that contain any Mark, including any iteration of or reference to the Marks.
You must comply with this Section 20.A. before any items previously bearing the Marks are offered for sale or auction by you or your lenders or lienholders, and you may not sell any items bearing the Marks;
(5) You must immediately cease using any of our Confidential Information (including the POpS System or similar technology and digital passwords and identifications that we have licensed or loaned to you or that otherwise are proprietary to us or the System), your client list, your telephone numbers, your email addresses, your social media pages, all copies of the Manuals, and any other confidential materials that we have loaned you;
(6) Within 30 days, you must deliver to us all signs, sign-faces, sign-cabinets, marketing materials, forms, and other materials containing any Mark, or otherwise identifying or relating to a Pump It Up Business that we request, and allow us, if we so choose and without liability to you or third parties for trespass or any other claim, to enter the Premises and remove these items from Franchised Business;
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 47–50)
What This Means (2025 FDD)
According to the 2025 Pump It Up Franchise Disclosure Document, the termination or expiration of the franchise agreement immediately terminates the limited exclusive rights granted to the franchisee in their protected area. Pump It Up then has the right to operate, or license others to operate, Pump It Up businesses anywhere within that protected area. This means that upon termination, the franchisee loses any territorial exclusivity they may have had during the term of the agreement.
This provision is standard in many franchise agreements, as it allows the franchisor to maintain control over the brand and market presence after a franchise relationship ends. For a prospective Pump It Up franchisee, this highlights the importance of understanding the conditions under which the agreement can be terminated and the potential consequences for their business. If the agreement is terminated, Pump It Up can immediately begin operating a competing location nearby, significantly impacting the former franchisee's ability to continue a similar business.
Furthermore, the franchisee must discontinue all use of the Pump It Up marks, remove the marks from the premises and any items used in the business, and cancel all advertising containing the marks. This complete separation from the Pump It Up brand is crucial to avoid any confusion among customers and to protect the integrity of the Pump It Up system. The franchisee must also cease using any confidential information, client lists, telephone numbers, email addresses, social media pages, and manuals provided by Pump It Up.
In addition to losing exclusive rights and brand usage, the franchisee must also fulfill other obligations upon termination, such as paying all outstanding sums to Pump It Up and its affiliates and delivering all signs, marketing materials, and other items related to the Pump It Up business. Pump It Up also has the option to enter the premises and remove these items. These obligations underscore the comprehensive nature of the termination process and the importance of adhering to the terms outlined in the franchise agreement.