What activities are Punch King Fitness franchisees permitted to do within their Territory?
Punch_King_Fitness Franchise · 2024 FDDAnswer from 2024 FDD Document
default of this Agreement, which may, among other things, be grounds for the termination of this Agreement.
Franchisee may not and is not granted the right to use other channels of distribution, such as the internet, catalog sales, telemarketing, or other direct marketing, to make sales outside of your Territory or operate using other Model Concepts unless we give you written consent to serve another specified area where no other Punch King Fitness franchise or company-owned unit is located. Franchisee acknowledges and agrees to obtain the prior written consent of Franchisor before advertising, offering, or selling beyond the aforementioned grant herein. If Franchisee is granted consent to service another specified area, Franchisee covenants and agrees to be obligated to pay royalty fees and other fees to Franchisor for the services performed or products sold.
B. Franchisor Restrictions
Provided that Franchisee is in compliance with this Agreement and Franchisee is not in breach of this Agreement, and so long as Franchisee meets the Minimum Performance Standards as set forth in this Agreement, subject to the limitation, and except as otherwise set forth herein, Franchisor shall not establish or franchise another to establish the same Punch King Fitness Model Concept under the Punch King Fitness Marks within the Territory during the Term of this Agreement. If, for any reason, the boundaries of the Territory are moved, altered, or eliminated, Franchisor shall re-define the boundaries of the Territory to correspond as nearly as possible, in Franchisor's discretion, to Franchisee's original Territory and Franchisor's decision shall be final and binding upon both Franchisor and Franchisee. Franchisor is not obligated to ensure that no other franchise will conduct operations in your Territory. Although such activities are discouraged, we reserve the right to determine how to respond to any such situation. Franchisor is not required to pay Franchisee any compensation for Franchisor or other franchisees soliciting or accepting orders in Franchisee's Territory. Under no circumstances will we be liable to you for violations by other Franchised Businesses of our policies on out-of-Territory sales and services.
C. Reserved Rights
Franchisor specifically reserves all rights not expressly granted to Franchisee in this Agreement. Without limiting the generality of the preceding sentence, Franchisor has the right to:
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- Own, acquire, establish, operate, and license others to establish and operate businesses like the Franchised Business or substantially similar to the Franchised Business, whether under the Marks or other proprietary marks outside the Territory.
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Source: Item 22 — CONTRACTS (FDD pages 56–215)
What This Means (2024 FDD)
According to the 2024 Punch King Fitness Franchise Disclosure Document, franchisees are generally restricted from using other distribution channels like the internet, catalogs, or telemarketing to make sales outside their designated territory. To operate using other Model Concepts or to serve another specified area, a franchisee must obtain written consent from Punch King Fitness, especially if that area contains no other Punch King Fitness franchise or company-owned unit. If consent is granted to service another area, the franchisee is obligated to pay royalty and other fees to Punch King Fitness for services performed or products sold in that area.
Punch King Fitness also retains specific rights not expressly granted to the franchisee. These reserved rights include the ability to operate or license others to operate similar businesses outside the franchisee's territory, acquire competitive businesses, establish different Punch King Fitness Model Concepts (like co-branded, pop-up, or virtual outlets) within or outside the territory, and sell authorized services and products through alternate channels of distribution such as internet sites or joint marketing strategies. Punch King Fitness, its affiliates, or other franchisees can also advertise and sell goods or services using the Punch King Fitness marks over the Internet.
These restrictions and reserved rights are important for prospective franchisees to understand, as they define the scope and limitations of their operational territory and the potential for competition from both the franchisor and other franchisees. It is critical for potential Punch King Fitness franchisees to fully understand these terms and how they might impact their business operations and revenue potential.