Legal Question in Legal Ethics in Indiana

Marketing Outside of Franchise Territory

I have been marketing for a non-medical home care franchisee, and just found out that he has me marketing in territories he does not own.

I found this info out, because I applied to buy a franchise (same co.) different territory, and found this in the co. franchise manual sent to me. The co. manual states that soliciting outside of your exclusive territory is cause for termination of the franchisee agreement. Is marketing legally considered soliciting and what recourse do I have?

When hired, I was told to sign an 18-month non-competee.


Asked on 10/03/02, 1:24 am

1 Answer from Attorneys
Mary Ann Wunder Wunder & Wunder

Re: Marketing Outside of Franchise Territory

Clearly marketing is soliciting. Houwever, you may have grounds to have your "employer" terminated from his francise. If you do want to acquire your own franchise, you should discuss with him whether he would treat your non-compete as binding for you taking a franchise in another area - and to begin ignore the fact that you believe that he has been marketing in an area larger than what he has contracted for. Whether he is marketing outside his franchise area depends upon whether the area he is using belongs to someone else and presumably the franchisor would notice when contracts are entered into in non-owned areas.

But if you are interested in purchasing a franchise, be sure that your current employer will not try to impose his covenant not to compete for the territory you may franchise for.

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Answered on 10/03/02, 9:52 am


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