Understanding Territorial Exclusivity Rights

In a franchise setup, one of the significant areas that need specific evaluation by a franchisee is the right to be granted an exclusive territory of operation to the exclusion of the right of the franchisor to set up other franchisees. Read on to know more about granting exclusive territorial rights.

- Seema Jhingan

India has increasingly attracted global brands to establish their franchise arrangements in the country to benefit from the ever expanding Indian market. Indian enterprises have also adopted franchise business models to expand in to the vast Indian territories. Typically, under a franchise model the franchisees benefit from the established business systems of the franchisors under a licensing arrangement with the right to use the trademark and brand of the franchisors, and open franchise outlets for distribution of the products/services of the franchisor, in consideration of payment of franchise fees and/or royalties to the franchisor.

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