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.
The Franchise Agreement
The franchise agreement is a contract between two parties identifying the Franchisor (seller) and the Franchisee (buyer) of certain rights to use a name, brand, territory and other resources owned or controlled by the Franchisor. A royalty fee is paid in exchange for the exclusive rights to use them.