Is Zoomin Groomin obligated to compensate a franchisee for soliciting or accepting sales from a client inside the franchisee's territory?
Zoomin_Groomin Franchise · 2025 FDDAnswer from 2025 FDD Document
We are not obligated to pay compensation to you for soliciting or accepting sales from a Client inside your Territory. However, we will normally direct all inquiries for mobile pet grooming from within your Territory to your Franchised Business. Should you (i) provide Services or otherwise operate your Franchised Business in another franchisee's territory or (ii) fail to strictly comply with Section 1.3 (C) 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 fees charged. Furthermore, you must notify such franchisee who has rights in such territory and provide payment to them within ten (10) days of receipt of payment by you.
Source: Item 9 — 01. Financial Statements and Exhibits. (FDD pages 68–156)
What This Means (2025 FDD)
According to Zoomin Groomin's 2025 Franchise Disclosure Document, Zoomin Groomin is not obligated to compensate a franchisee for soliciting or accepting sales from a client inside the franchisee's territory. However, Zoomin Groomin states that they will normally direct all inquiries for mobile pet grooming from within a franchisee's territory to that franchisee's business.
However, if a franchisee provides services or operates in another franchisee's territory, or fails to comply with specific operational requirements within 15 days of being notified that permission to operate outside their territory is revoked due to a new franchisee purchasing rights, the franchisee must compensate the other franchisee. This compensation is equivalent to 100% of all grooming and convenience fees charged. The franchisee operating outside their territory must also notify the franchisee whose territory was encroached upon and provide payment within 10 days of receiving payment for the services.
This policy highlights the importance of adhering to territorial boundaries and operational guidelines set by Zoomin Groomin. While Zoomin Groomin is not obligated to compensate a franchisee for sales they might incidentally gain within that territory, franchisees are penalized for actively operating outside their designated area without permission. This encourages franchisees to focus on their own territory and avoid disputes with other franchisees in the system.