Does Punch King Fitness have the right to withdraw permission for Outside Territory Activity?
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.
Source: Item 22 — CONTRACTS (FDD pages 56–215)
What This Means (2024 FDD)
Based on the 2024 Punch King Fitness Franchise Disclosure Document, a franchisee is not granted the right to use other channels of distribution to make sales outside of their territory unless they receive written consent from Punch King Fitness. If a franchisee is granted consent to service another specified area, they are obligated to pay royalty fees and other fees to Punch King Fitness for the services performed or products sold.
Punch King Fitness reserves all rights not expressly granted to the franchisee in the agreement. This includes the right to sell or franchise others to sell services and products authorized for the Punch King Fitness Franchised Business using the Marks or other trademarks through alternate channels of distribution. These channels include storefront, brick and mortar, co-branded, pop-up, virtual, or mobile outlets, joint marketing with partner companies, direct mail, catalog sales, and internet sites.
While the FDD outlines the conditions under which a franchisee may conduct business outside of their designated territory with written consent, it does not explicitly state whether Punch King Fitness has the right to withdraw this permission once granted. A prospective franchisee should seek clarification from Punch King Fitness regarding the terms and conditions under which outside territory activity permission can be revoked.