Legal Blog

A Franchise Lawyer’s Perspective: The Amorphous Franchise Territory Getting What You Pay For

Franchised outlets are multiplying faster than fruit flies on a hot banana.  Look no further than the nearest mall to confirm this phenomenon. As a potential franchisee, you cannot expect protection from other brands invading your territory. However, you should expect that your franchisor will at least provide you with protection from your own brand, right?  Surprisingly, many franchisors do not afford the protections their franchisees expect. A franchisee’s exclusive territory can only arise from one place – the franchise agreement.  Territories do not stem from discussions with a sales representative or even the president of the franchisor.  They do not arise out of the Franchise Disclosure Document or from discussions with other franchisees. They are not a matter of practice, and they are not a constitutional right.  The bottom line is that if your territory is not clearly spelled out in the franchise agreement, you might as well consider it non-existent. A franchise agreement that references your protected territory is a great start, but it is not always the end of the analysis.  Even if a territory is set forth in the agreement, there are many situations that can affect your territorial rights. It is vital that you carefully review your franchise agreement to assure that your territorial rights are exactly as you expect them.  Set forth below are several situations to look for when reviewing a franchise territory. Click here to read the entire article If you have any questions regarding the content of this article, or any other franchise law matter, please contact Brian Loffredo at 301.575.0345 | bloffredo@offitkurman.com

ABOUT BRIAN LOFFREDO

Franchise AgreementBrian is a commercial litigator with more than fifteen years of experience representing clients in the franchise industry. Brian routinely assists clients during the licensing and franchise/FDD review process, as well as with the resolution of franchise-related disputes, including those involving terminations, territorial disputes, fraud, disclosure/relationship law violations and breaches of contract.

In addition, Brian represents and counsels clients in the construction industry on matters involving litigation, construction defects, licensing and compliance, collections, mechanic’s liens, payment bond and Miller Act claims, contract drafting, and compliance with home improvement laws and other construction industry laws.

Brian also has extensive experience representing financial institutions with workouts, collections and residential / commercial foreclosures.

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