Does the Zoomin Groomin Franchise Agreement address dual distribution?
Zoomin_Groomin Franchise · 2025 FDDAnswer from 2025 FDD Document
. A year will include each fiscal year (including any partial year) ending on December 31.
1.7.Dual Distribution
A. Protected Territory
You will not receive an exclusive territory. You may face competition from other franchisees, from outlets that we own, or from other channels of distribution or competitive brands that we control. However, you will receive a protected territory, meaning a geographical area within which we promise not to establish a Zoomin Groomin company owned or franchised outlet. You may not accept orders from consumers to provide Services outside of your Territory, nor may you use other channels of distribution, such as the Internet, catalog sales, telemarketing, or other direct marketing, to make sales outside your Territory without our prior written approval as provided in Section 1.3 (C) of this Agreement.
B. Limitations on Exclusivity
Your right to exclusivity is limited by our Reserved Rights under Section 1.1. (E) of this Agreement and this Section 1.7. You may also face competition from other franchisees, outlets that we own, other channels of distribution or competitive brands that we control for a Client that resides in your Territory.
C. Other Brands
We or an affiliate may make sales within your Territory using trademarks different from the ones you will use under this Agreement. As of the Effective Date, we and our parent plan to establish (or acquire) and operate or franchise a business under a different trademark which will sell goods or services similar to those you will offer. Under this plan, franchisees will offer pet grooming services through brick-and-mortar locations under a different trademark.
Source: Item 9 — 01. Financial Statements and Exhibits. (FDD pages 68–156)
What This Means (2025 FDD)
Yes, the 2025 Zoomin Groomin Franchise Agreement addresses dual distribution. While franchisees receive a protected territory, it is not exclusive. Zoomin Groomin explicitly states that franchisees may face competition from other franchisees, company-owned outlets, other distribution channels, or competitive brands controlled by Zoomin Groomin. This means that even within a franchisee's protected territory, Zoomin Groomin or its affiliates could operate similar businesses under different trademarks.
Zoomin Groomin also outlines plans to establish or acquire and operate/franchise a business under a different trademark that sells similar goods or services. Under this plan, franchisees will offer pet grooming services through brick-and-mortar locations under a different trademark. As the new franchise system develops, the new franchisor or its franchisees who use the different trademark will solicit and accept orders within the franchisee's territory.
This dual distribution strategy could impact a franchisee's potential customer base and revenue. A prospective franchisee should carefully consider the implications of this non-exclusive territory and the potential for competition from other channels controlled by Zoomin Groomin. It would be prudent to inquire about the company's specific plans for these alternative brands and distribution methods within the franchisee's target market.