Does the Zoomin Groomin franchise agreement grant franchisees third-party beneficiary status to agreements between Zoomin Groomin and other franchisees?
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)
Based on the 2025 Zoomin Groomin Franchise Disclosure Document, it is not explicitly stated whether franchisees are granted third-party beneficiary status to agreements between Zoomin Groomin and its other franchisees. However, the document does outline certain obligations and interactions between franchisees that could be relevant to this question.
For instance, Zoomin Groomin grants franchisees the right to operate within a defined territory, but this territory is not exclusive. Franchisees may face competition from other franchisees, company-owned outlets, or other channels of distribution controlled by Zoomin Groomin. If a franchisee operates outside of their designated territory without permission and encroaches upon another franchisee's territory, any funds obtained from that unauthorized operation will be passed on to the franchisee whose territory was infringed upon. This suggests a level of consideration for the interests of fellow franchisees.
Additionally, if a franchisee is given temporary permission to operate outside their territory and Zoomin Groomin later sells that area to a new franchisee, the original franchisee is obligated to transition their clients in that area to the new franchisee. This transition process requires the original franchisee to provide a list of clients served in the area and to make commercially reasonable efforts to ensure a smooth transfer of business. This further emphasizes the importance of cooperation and consideration between franchisees within the Zoomin Groomin system.
While the FDD does not directly address third-party beneficiary status, the provisions regarding territory, competition, and client transitions suggest that franchisees have certain rights and obligations that could be affected by agreements between Zoomin Groomin and other franchisees. A prospective franchisee should seek clarification from Zoomin Groomin regarding their legal standing in relation to agreements involving other franchisees and whether they have any recourse as a third-party beneficiary.