Exclusive Territory Law and Legal Definition

Exclusive territory means a fixed geographic area in which a franchisee is given the right to operate, and in which the franchisor is restricted from establishing any other units. A franchisor appoints only one franchisee for a particular territory; s/he cannot sell that area to a different franchisee. Also the franchisor cannot carry on business himself in the territory, the franchiser and/or another franchisee will not compete for the same business within the same geographic area.