Question: I’ve been researching a retail franchise business and want to make sure that the territory I’m interested in would be exclusively mine. I’ve read a few testimonials about franchises not having clear rules in regard to this. How does it work?
Answer by Jeff Elgin:
This one of the most important and contentious topics in the franchise industry over the past 20 years.Many, but not all, franchises grant an “exclusive territory” to their franchisees as part of the rights given under the franchise agreement contract. The purpose of doing this is to assure the franchisee that they will have some area in which they can market and operate under the franchise brand without any competition from another franchisee or even the franchise company itself. This territory is normally described in geographical terms (area code, street or waterway boundaries) though it can also be described as a specified radius originating from the actual location of your unit.