Every franchise agreement should discuss the issue of the source of customers. This is known as the geographical territory, protected territory or exclusive territory. Many agreements spell out the zone or area of your customer source. It is important to understand the Geographical, Protected or Exclusive Territory Clause in the Franchise Agreement.
Protected Territory Clause
The protected territory clause is a geographical or exclusive zone section of the franchise agreement. The protected territory clause identifies the area a franchisee is granted rights to for operations. For the Franchisee, the focus on interpreting this clause is to protect your rights to the customer base.