What is the definition of the 'Protected Territory' for a Golden Corral franchise?
Golden_Corral Franchise · 2025 FDDAnswer from 2025 FDD Document
- 1.3 Protected Territory: During the term of this Agreement, Franchisor shall not establish and operate, nor license another to establish and operate, a restaurant under the Proprietary Marks and the System within a radius of three (3) miles from the front door of the Approved Location (hereinafter the "Protected Territory"); provided, however, that Franchisor retains the right, among other rights, both within and outside of the Protected Territory, and regardless of the proximity to the Approved Location or the financial impact to the Restaurant established pursuant to this Agreement, and without offering Franchisee any rights therein, (i) to own, acquire, establish and operate, and to license others to establish and operate, restaurant businesses utilizing the Proprietary Marks and/or the System at or from educational institutions (including, without limitation, colleges and universities); hospitals; airports; food courts; manufacturing, industrial or research facilities; office buildings; convention centers; supermarkets; gasoline stations; department stores; contract food services; theaters; convenience stores; vending machines; fixed/mobile modular units; any casino or other gambling facility; hotels; kiosks; any sports facility, public transportation facility, or public entertainment facility; or any facility which is owned by, or operated by or under contract with, any military or other government entity; (ii) to sell or distribute, at retail or wholesale, directly or indirectly, or license others to sell or distribute, any products under any proprietary marks, including the Proprietary Marks; and, (iii) to own, acquire, establish and/or operate, and franchise others to establish and operate, other restaurant concepts now or hereinafter offered by Franchisor, as well as businesses under proprietary marks other than the Proprietary Marks or other systems, whether such restaurant concepts or businesses are similar to or different from the Restaurant, at any location within or outside the Protected Territory.
Source: Item 22 — CONTRACTS (FDD pages 84–85)
What This Means (2025 FDD)
According to the 2025 Golden Corral FDD, the Protected Territory is defined as the area within a three-mile radius from the front door of the Approved Location. During the term of the Franchise Agreement, Golden Corral will not establish or license another party to establish or operate a restaurant under the Golden Corral Proprietary Marks and System within this radius. This grants the franchisee a degree of exclusivity in their immediate area. However, this protection is subject to several significant exceptions.
Golden Corral retains the right to operate or license others to operate restaurants under its Proprietary Marks and System in various locations, even within the Protected Territory. These locations include educational institutions, hospitals, airports, food courts, manufacturing facilities, office buildings, convention centers, supermarkets, gasoline stations, department stores, contract food services, theaters, convenience stores, vending machines, casinos, hotels, kiosks, sports facilities, public transportation facilities, public entertainment facilities, and facilities owned or operated by military or other government entities. This broad exception significantly limits the practical exclusivity a franchisee might expect, as many potential high-traffic locations are excluded from the protected territory.
Furthermore, Golden Corral reserves the right to sell or distribute any products under its proprietary marks, directly or indirectly, or license others to do so, both within and outside the Protected Territory. They can also own, acquire, establish, or operate other restaurant concepts, whether similar to or different from the Golden Corral restaurant, under different proprietary marks or systems, without offering any rights to the franchisee. This means that Golden Corral could potentially introduce competing brands or alternative service models within the franchisee's territory, further diluting their market share. Prospective franchisees should carefully consider these exceptions and evaluate the potential impact on their business before investing in a Golden Corral franchise.