Can a buyer of a franchise select the business location?
The franchise territory is defined in the franchising agreement, but be aware the franchiser generally has the "bigger say" and can limit the territory and location of the franchising business so long as it has a business reason to justify the restricted area. For example, say you plan on opening the first Burger King in downtown Boston, and you want to be the only Burger King in downtown Boston. Burger King is likely to insist on the right to open another restaurant a few blocks away, so you would set out on a map the very limited few blocks for your "exclusive". However, Burger King may be willing to allow you to have the right of first refusal for a new Burger King franchise in an adjoining "neighborhood" as part of your deal with them.
Issues regarding territory may later arise, for example, (a) due to a change in the owner of the trademarked property, a competing business in the same industry and having the right to use the same trade name or trade mark opens in the "neighborhood", (b) trademarked property being distributed to other retail or company-owned outlets, or (c) the protected area is lost for failure to meet sales quotas.
State Law Center
|
Legal Resource Directory
|
Legal Articles
|
Insurance Advice and Quotes
|
FreeAdvice Answers
|
Community Forums
