What is the definition of the 'Protected Territory' for a Golden Corral Restaurant?
Golden_Corral Franchise · 2025 FDDAnswer from 2025 FDD Document
During the term of the Franchise Agreement, Golden Corral will not establish and operate, nor license anyone else to establish and operate, a Restaurant under the Proprietary Marks and the System within a radius of 3 miles from the front door of the Restaurant (the "Protected Territory"), as described in the Franchise Agreement, except in the types of facilities excluded from the Protected Territory described below. Your Protected Territory is not exclusive, because we retain rights to Non-Traditional Sites as described below. Because your Protected Territory is not exclusive, we are required to include the following statement: "You will not receive an exclusive territory. You may face competition from other franchisees, from outlets that we own, or from other channels of distribution or competitive brands that we control."
Source: Item 12 — TERRITORY (FDD pages 48–53)
What This Means (2025 FDD)
According to Golden Corral's 2025 Franchise Disclosure Document, a franchisee is granted a 'Protected Territory' during the term of the Franchise Agreement. This territory is defined as a radius of 3 miles from the front door of the Golden Corral restaurant. Within this Protected Territory, Golden Corral agrees not to establish or operate, nor license anyone else to establish and operate, another Golden Corral restaurant. However, this protection is not exclusive.
Several exceptions exist that limit the scope of this protected territory. Golden Corral retains the right to operate restaurants at Non-Traditional Sites, which include locations such as educational institutions, hospitals, airports, food courts, manufacturing facilities, office buildings, convention centers, supermarkets, gasoline stations, department stores, casinos, hotels, and sports facilities. The presence of these non-traditional sites within the 3-mile radius does not violate the franchisee's protected territory.
The FDD explicitly states that franchisees "will not receive an exclusive territory" and may face competition from other franchisees, company-owned outlets, other distribution channels, or competitive brands controlled by Golden Corral. Furthermore, Golden Corral retains the right to use alternative distribution channels, including the Internet, within the Protected Territory. They can also sell and distribute products under their proprietary marks at retail or wholesale, directly or indirectly, or license others to do so. They can also operate other restaurant concepts or businesses under different proprietary marks within or outside the Protected Territory. These activities can be undertaken regardless of their proximity to the franchisee's location or their financial impact on the restaurant, without offering the franchisee any rights or compensation.
Prospective franchisees should be aware that while they receive a Protected Territory, its exclusivity is limited. The presence of non-traditional sites, the potential for Golden Corral to operate other concepts, and the use of alternative distribution channels within the territory mean that franchisees may face competition from various sources, even within their Protected Territory. This lack of exclusivity is a standard practice in the franchise industry, as franchisors often seek to maximize brand presence and market penetration through diverse channels.