What is the Punch King Fitness franchisee's obligation regarding compliance with all conditions specified by Punch King Fitness for Outside Territory Activity?
Punch_King_Fitness Franchise · 2024 FDDAnswer from 2024 FDD Document
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.
Source: Item 22 — CONTRACTS (FDD pages 56–215)
What This Means (2024 FDD)
According to Punch King Fitness's 2024 Franchise Disclosure Document, a franchisee is not allowed to use other distribution channels such as the internet, catalog sales, telemarketing, or other direct marketing to make sales outside of their territory. They also cannot operate using other Model Concepts unless Punch King Fitness gives written consent to serve another specified area where no other Punch King Fitness franchise or company-owned unit is located.
The franchisee must obtain prior written consent from Punch King Fitness before advertising, offering, or selling beyond their granted territory. If consent is granted to service another area, the franchisee is obligated to pay royalty fees and other fees to Punch King Fitness for the services performed or products sold in that area.
This means that a Punch King Fitness franchisee's ability to expand their sales and marketing efforts beyond their initially assigned territory is heavily controlled by the franchisor. The franchisee must seek and receive explicit permission, and if granted, they will incur additional royalty and other fees on any sales generated outside their primary territory. This protects existing franchisees and company-owned units from competition while allowing for controlled expansion when deemed appropriate by Punch King Fitness.