What is the definition of 'Territory' for the purposes of the post-term restriction for Crown Gold Exchange?
Crown_Gold_Exchange Franchise · 2024 FDDAnswer from 2024 FDD Document
- “Territory” means the territory stated on the Location Acceptance Letter.
ARTICLE 2. GRANT OF LICENSE
- 2.1 Grant. Crown Gold Franchising grants to Franchisee the right to operate a Crown Gold Exchange business solely at the Location.
If no Location is stated on the Summary Page when this Agreement is signed, then the parties will determine the Location in accordance with Section 6.1.
Franchisee shall develop, open and operate a Crown Gold Exchange business at the Location for the entire term of this Agreement.
Source: Item 22 — CONTRACTS (FDD pages 38–39)
What This Means (2024 FDD)
According to Crown Gold Exchange's 2024 Franchise Disclosure Document, the 'Territory' is defined as the territory stated on the Location Acceptance Letter. This letter is issued when Crown Gold Franchising accepts the franchisee's proposed location.
Crown Gold Franchising determines the Territory in its good faith discretion, substantially in accordance with Item 12 of the Franchise Disclosure Document. However, if Crown Gold Franchising fails to state the Territory in writing within 60 days after the franchisee opens the business to the public, the Territory will be deemed to be the zip code which includes the location of the franchised business and the zip codes which immediately surround the location and together comprise a total of 50,000 population.
This definition of 'Territory' is important because it is used to define the scope of the post-term non-compete clause. For two years after the Franchise Agreement expires or is terminated, the franchisee is restricted from operating a competing business within five miles of their Territory or the territory of any other Crown Gold Exchange business operating on the date of termination. If the Territory is not determined before termination, the non-compete area will be the Development Area and the territory of any other Crown Gold Exchange business.