The franchise contract that Pamela signed with DEF Company specified she would have an exclusive sales territory. While the contract was still in force, DEF opened a corporate-owned store within her territory. DEF is guilty of

Question

Quizplus · Accepted Answer

DEF Company is guilty of encroachment, which refers to the franchisor opening a corporate-owned store or granting another franchise within the exclusive territory of an existing franchisee. This is a breach of the franchise contract and can negatively impact the sales of the existing franchisee.

The Franchise Contract That Pamela Signed with DEF Company Specified