Legal Question in Business Law in California

To Whom it May Concern:

If franchisees' territories are defined in their franchise agreements as being restricted by specific geographic boundaries (e.g., one franchisee might be granted the territory of Rhode Island, another Massachusetts), independent internet sites established by each could result in encroachment of these territories. While surely the best way to manage this issue would be to include specific language in the franchise agreements governing online presence, how is encroachment as a result of a website/web marketing dealt with when legacy agreements define territories solely as described above, without reference to internet sites?

Thank you for your consideration.

Gary


Asked on 5/04/10, 11:04 am

2 Answers from Attorneys
Kevin B. Murphy Franchise Foundations, APC

You need to consult with a franchise attorney to explore this issue. The franchise agreement is just one document that needs examination. Another are the disclosures made in the FDD Franchise Disclosure Document regarding how territories are defined and granted. A third element would be custom and practice within the given industry. Consult with a competent franchise attorney for advice on the specifics.

Kevin B. Murphy, B.S., M.B.A., J.D. - Mr. Franchise

Franchise Attorney

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Answered on 5/09/10, 6:49 pm
John R. Browning, Esq. [email protected] (949 234-6266)

Internet sales as potential violations of territorial rights in franchise agreements is a growing area of the law, and now typically addressed in the franchise agreement. You need to have someone review it carefully, as well as the other disclosure documents.

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Answered on 5/26/10, 5:41 pm


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