15Article 7: Territorial exclusivity

It is frequent that the franchisor grants the franchisee an exclusive territory. However, there are also cases where the franchisor does not undertake any such obligation because franchisor prefers to remain free to decide at its discretion the extent of protection it wishes to give to each franchisee by not appointing others too close to the existing ones. Where this is the case, Article 7 should not be included in the Contract.

7.1 During the Term of this Contract, the Franchisor shall not itself operate or license any person other than the Franchisee to operate the Business within the Territory or to use any of the IP Rights in relation to a business similar to the Business within the Territory.

7.2 For the Term of this Contract, the Franchisor shall not sell the Products to any third party within the Territory. The Franchisor is however entitled to sell the Products to third parties established outside the Territory, but may not actively solicit or otherwise provoke such sales to any affiliates or third parties with the purpose of circumventing the Franchisee’s exclusivity under this Article16.

7.3 During the Term of the Contract, the Franchisee shall not seek customers for the Products outside the Territory.

Within the EU this clause may conflict with the rules on competition, especially when the franchising network may be considered as a selective distribution system. See, Introduction, § 9.

15
Tick the box if the Franchisee is to be granted an exclusive territory. Otherwise, the Franchisor will be free to appoint other franchisees wherever it likes and to sell the Products in competition with the Franchisee (the only limit being the general obligation of good faith).

16
This clause should be modified if the Franchisor wishes to retain the right to sell the products through other channels