Federal regulation prohibits franchise agreements from containing territorial restrictions.

Question

Quizplus · Accepted Answer

Federal regulation does not prohibit franchise agreements from containing territorial restrictions. In fact, territorial protection is a common aspect of franchising and is often included in franchise agreements. However, there are limitations on the extent of the territorial restrictions that can be included in a franchise agreement, and franchisees have certain rights to compete with other franchisees within the same system.

Federal Regulation Prohibits Franchise Agreements from Containing Territorial Restrictions