Can I grant exclusive territories to prevent franchisees from competing?

Yes. Exclusive or protected territories are a common and generally lawful way to limit overlap. Whatever you grant must be disclosed accurately in Item 12 of your FDD, including any channels you reserve for yourself.

Can I tell franchisees what prices to charge so they don't undercut each other?

Be careful. Mandating the resale prices independent franchisees charge raises antitrust concerns. Most systems use suggested pricing or maximum advertised pricing rather than fixed-price requirements.

How do I handle online and delivery sales that cross territory lines?

Decide the rule in your agreement. Many franchisors credit digital and delivery orders to the territory where the customer is located, which keeps reserved channels from feeling like encroachment.

What if two franchisees are already in conflict?

Use the escalation path in your agreement — internal resolution, then mediation, then arbitration or court if needed — and apply your standards and territory rules consistently to both. Getting counsel early helps avoid claims that you favored one side. Reidel Law Firm helps franchisors draft the territory, encroachment, and dispute-resolution terms that keep a system competing outward instead of inward. Talk to a franchise attorney about your franchise program, or contact us to review your agreement and FDD.

Handling Competition Between Your Franchisees

Competition between franchisees is best handled through the franchise agreement itself — clear territory rights, encroachment and channel rules, consistent standards, and a defined dispute process — not improvised after a conflict erupts. As a franchisor, your goal is to point your franchisees’ competitive energy at outside rivals, not at each other. The systems that stay healthy are the ones that wrote the rules of comp