Can an interim operator of a Zoomin Groomin franchise enter into a new Franchise Agreement?
Zoomin_Groomin Franchise · 2025 FDDAnswer from 2025 FDD Document
permission we grant for you to operate outside of the Territory will be freely revocable by us for any reason or no reason at all.
b.) Acknowledgment
You acknowledge that any permission granted pursuant to this Section 1.3.C. is only temporary in nature and the only way for you to gain protection over any geographical region outside of your Territory is to purchase franchise rights over such geographical area pursuant to the then-current disclosure document and franchise agreement. By offering Services or otherwise operating outside of your Territory, you acknowledge and accept that you may cultivate business relationships that must be transitioned to someone else. You acknowledge that any undeveloped area could be sold to a new franchisee at any point in time, and you have no right of first refusal in such area. By requesting permission and by offering Services or otherwise operating your Franchised Business outside of your Territory, you agree to follow our plans and guidance for transitioning business to a new owner upon notification by us that a new franchisee has acquired the right to operate within such area.
c.) Procedure on Withdrawal of Permission
You will immediately stop providing Services to Clients located outside of your Territory and stop all activities associated with the operation of your Franchised Business outside of the Territory upon notification from Zoomin Groomin that a new franchisee has purchased franchise rights over such territory. Furthermore, you will provide a list of all Clients served by you in such area to the new franchisee and make commercially reasonable efforts to transition all business to the new franchisee. Time is of the essence when complying with a transition to a new franchisee.
d.) Consequences of Operating Without Permission
Operating outside of your Territory without our permission is grounds for termination, but termination is not our exclusive remedy.
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, if a franchisee is operating outside of their designated territory temporarily, they can gain permanent rights to that expanded area only by purchasing franchise rights to it. According to the FDD, this purchase would need to be made under the then-current disclosure document and franchise agreement. This means that an existing franchisee acting as an interim operator in a new territory does not have any inherent right to that territory and must formally purchase it to secure their rights.
Zoomin Groomin retains the right to sell any undeveloped area to a new franchisee at any time, and the interim operator has no right of first refusal. If a new franchisee acquires the right to operate in the area where the existing franchisee is temporarily operating, the existing franchisee must follow Zoomin Groomin's plans to transition the business to the new owner. This includes providing a list of all clients served in that area and making commercially reasonable efforts to ensure a smooth transition.
If a Zoomin Groomin franchisee operates outside their territory without permission, it can lead to termination of the franchise agreement. However, termination is not the only recourse available to Zoomin Groomin. The franchise agreement stipulates that any funds earned by the franchisee while operating outside their permitted territory within another franchisee's territory must be turned over to the new franchisee. This provision underscores the importance of adhering to the territorial restrictions outlined in the franchise agreement and obtaining proper authorization for any expansion beyond the initially granted territory.