What is the Punch King Fitness franchisee's responsibility regarding soliciting outside the Territory?
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 restricted from using various distribution channels to make sales outside of their designated territory. These channels include the internet, catalog sales, telemarketing, or other direct marketing methods, as well as operating under different Model Concepts, unless they receive explicit written consent from Punch King Fitness.
Before advertising, offering, or selling beyond the boundaries of their territory, a Punch King Fitness franchisee must obtain prior written consent from the franchisor. 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 policy ensures that Punch King Fitness maintains control over its brand and market distribution, preventing potential conflicts between franchisees and ensuring consistent quality and service. It also allows Punch King Fitness to collect royalties on all sales, even those occurring outside a franchisee's primary territory when permission is granted. A prospective franchisee should carefully consider these restrictions and obligations, as unauthorized sales outside the territory could lead to a breach of the franchise agreement.