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Dispute Resolution of Territory for Mobile Franchised Companies

Dispute Resolution of Territory for Mobile Franchised Companies
Author: Lance Winslow

Franchisors of home based and mobile businesses need to carefully watch their franchisees who innately try to hunt in their fellow franchisees territories. The most important advice a franchisor should give the franchised outlets in this case is to work it out themselves. A simple policy is best for example here is a possible excerpt from a franchise manual which lays out some basic understandings:

“The franchisees should be able to work out any problems you may have among yourselves. If you do have problems, here is the chain of command: Talk to neighboring franchisee; Put it in writing with the neighboring franchisee; Mail us a copy of fax it; If problem persists, talk to regional director; If it still can not be worked out call franchisor; If it is still a problem, prepare to go to arbitration. Remember, you need to procure an understanding that can be considered a win/win situation for everyone involved with the end user (the customer).”

Additionally here are some thoughts for franchisees of mobile or home based businesses, which can help them get along in a franchise system without stepping on other franchisee’s territories or violating their franchise agreements. If you own a franchise these are some things you might think of.

Franchisees Should Be Fair To Each Other; Do Not Be A Ball Hog

When we say be fair, we mean be honest and have integrity. When you purchased your franchise business from us you were assigned an exclusive territory. You can review this exclusive territory in the exhibit of your franchise agreement. Your neighboring team member (franchisee) was also granted an exclusive territory. These territories do not overlap. If there is a territory dispute and you are operating within your exclusive territory as outlined in your exhibit, then you are in the right, absolutely and 100%. If there is a dispute and it is not in your exclusive territory, you are in the wrong and should act accordingly with your fellow franchisee. You should yield that particular housing tract, town, office complex, account or group of buildings to your neighboring franchisee immediately unless he/she allows you to work there out of pure kindness. It’s a similar idea to an easement and an agreement between you and your neighboring franchisee should be put in writing. You should also send copy of such ad hoc agreements by fax to your franchisor ASAP so that they can notify your regional director and put a notification in your respective franchisee files. We need to know and you should have agreed upon the exact: Address(s); Longitude/Latitude; Names, Accounts; Duration of Agreement

If there will be any money changing hands for the additional territories, the franchisor should be notified prior to the agreement and approve such action. If your franchise agreement has no provision for this as most do not it is a good idea to have it in writing. If you are trading one location for another, that should also be agreed upon and both locations or all locations should be delineated on a map and attached to your agreement. You might wish to consider these words to keep problems out of the courts and resolve territory disputes by way of understanding before they occur. Think about it.

Lance Winslow