Posted by Elizabeth Gore-Jones
on 12 February 2024
Over the past 20 years, there has been a real move away from granting exclusive territories.
Franchisors used to grant exclusive territories. However, they found themselves in difficult circumstances if the population of the territory grew a lot or otherwise the territory was too big for a franchisee to properly service and the franchisor did not have the right to change the size of the territory.
That resulted in exclusive marketing territories becoming more popular. In these cases, franchisees would have exclusivity with respect to the area they could market, however, they were able to provide the goods and/or services anywhere.
This also served the purpose of allowing a franchisee to undertake work which was referred specifically to that franchisee without the requirement to refer it to the franchisee in whose territory the work was to be performed.
This saw a great reduction in disputes between franchisees about territories.
If a franchise is limited to a specific site, for example, a retail tenancy, then we often see that the franchisor does not grant an exclusive area at all.
