To whom does a Zoomin Groomin franchisee pay the penalty for operating in another franchisee's territory?
Zoomin_Groomin Franchise · 2025 FDDAnswer from 2025 FDD Document
Should you (i) provide Services or otherwise operate your Franchised Business in another franchisees territory or (ii) fail to stop providing Services or otherwise operate the Franchised Business within fifteen (15) days after being advised that our permission to provide Services or otherwise operate the Franchised Business outside the Territory is revoked because a new franchisee purchased certain rights, then you will pay to the franchisee in whose territory such Services were provided an amount equal to 100% of all grooming and convenience fee collected by you for such Services. Furthermore, you must notify such franchisee who has rights in such territory and provided payment to them within ten (10) days of receipt of payment by you.
Source: Item 12 — TERRITORY (FDD pages 32–34)
What This Means (2025 FDD)
According to Zoomin Groomin's 2025 Franchise Disclosure Document, if a franchisee provides services or operates their franchised business in another franchisee's exclusive territory, they are required to compensate the affected franchisee. Specifically, the franchisee who encroached on the territory must pay the franchisee whose territory was violated an amount equal to 100% of all grooming and convenience fees collected for services provided in the other franchisee's territory.
Furthermore, the Zoomin Groomin franchisee who violated the territory agreement must notify the franchisee whose territory was encroached upon within ten days of receiving payment for the services provided in the incorrect territory. This payment serves as a penalty for operating outside of the franchisee's designated area and infringing upon the rights granted to the other franchisee.
This stipulation underscores the importance of adhering to the defined territory boundaries outlined in the Franchise Agreement. It also highlights the financial consequences of violating these boundaries. For a prospective Zoomin Groomin franchisee, this means understanding the territory assigned to them and ensuring all operations are confined within those limits to avoid incurring penalties and maintaining positive relationships with fellow franchisees.