Franchise Encroachment FAQ
Q. MY FRANCHISOR HAS JUST STARTED SELLING OVER THE INTERNET IN COMPETITION WITH ME. WHAT CAN I DO?
Internet encroachment is one of the more common forms of encroachment today. Michael Garner pioneered the field of protecting franchisee rights on the Internet. Depending on what your franchise agreement and the law say, you may be able to stop the franchisor from selling in your area or you may be able to share in the profits of its sale.
Q. MY FRANCHISE AGREEMENT SAYS I ONLY HAVE THE RIGHT TO A "LOCATION." DOES THAT MEAN I DON'T HAVE PROTECTION AGAINST ENCROACHMENT?
A number of cases have been decided that protected franchisees’ rights to their markets even though their agreements specified that they were only entitled to a “location.” Your rights will depend upon what the entire contract says, upon your state’s law and upon the particular circumstances of your situation.
Q. CAN MY FRANCHISOR SELL THE SAME PRODUCTS UNDER A DIFFERENT NAME IN MY TERRITORY?
It depends, in part, upon what your agreement says. If your franchisor is selling into your territory so that it hurts you, it is likely that you have a claim against it.
Q. I HAVE A "TERRITORY" IN MY AGREEMENT, BUT I SELL TO, AND ADVERTISE IN, A MUCH BIGGER AREA. WHAT KIND OF PROTECTION DO I HAVE?
A number of cases have recognized that franchisees have rights that go beyond what the contract says. Particularly if the franchisor has told you, in the past, that it would not sell in this larger area, or if the franchisor’s sales are hurting you badly, you may be entitled to relief.
Q. MY FRANCHISOR IS ENCROACHING ON MY TERRITORY, BUT NOT ON THE TERRITORY OF OTHER FRANCHISEES. DOES THAT VIOLATE THE LAW?
A number of states have laws against discrimination between franchisees and courts have, on other grounds, found violations of law where franchisors have treated some franchisees different from others.