Non-exclusive territory
What it means
Not every franchise comes with a protected patch. In a non-exclusive territory, the franchisor retains the right to open company outlets, appoint other franchisees, or sell online into your area.
This directly affects your revenue potential and risk of encroachment. A non-exclusive arrangement is not automatically bad, but it must be priced into your expectations.
In practice
Check whether your territory is exclusive or non-exclusive, and exactly what the franchisor may do within it. If non-exclusive, understand how close another outlet could open and whether online sales are carved out.
A real example
A juice franchisee accepts a non-exclusive territory at a lower fee, understanding the franchisor could open a second outlet in the same suburb, and factors that risk into her forecasts.
Non-exclusive territory, FAQs
What is a non-exclusive territory?
A territory where the franchisor can still open other outlets, appoint other franchisees, or sell online, unlike an exclusive territory that is protected from that.
Is a non-exclusive territory a bad deal?
Not necessarily, it may come at a lower cost, but it carries encroachment risk. Understand exactly what the franchisor may do in your area before accepting.
See the full franchise glossary, the Fee Index or our buyer guides.