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Discover key insights every franchisee needs to navigate territory rights, with guidance from two of the UK’s leading experts MAPPED OUT FOR SUCCESS ranchising in the UK isn’t governed by a single, overarching law, meaning the structure of the relationship between franchisors and franchisees relies on one key document: the franchise agreement. This agreement should clearly outline the rights, responsibilities, and expectations of both parties.Without that clarity, things can quickly become complicated. The key to protecting your investment often lies in the territorial rights granted within that agreement. These rights can define everything from the market you can target to how you’re shielded from competition. Enter our experts: lawyer Emily Sadler, Senior Commercial Solicitor at Harper James, and franchise consultant Maria Misyurina, co-founder of Franchising Guru with 15 years of experience in franchising and law. Both highlight the importance of legal due diligence in ensuring that the territorial terms align with your business goals and provide the protection you need. As Maria points out, in the UK, franchising is largely based on contract law with guidance from the British Franchise Association’s Code of Ethics, so it’s crucial to pay close attention to the details. “The relationship between the parties depends primarily on the terms set out in their franchise agreement, which should clearly define the rights and responsibilities of both parties,” she points out. “Remember, any discussions or changes about territory must be documented in writing to be legally binding – without that, there’s no guarantee of protection. It’s highly advisable to engage an experienced lawyer to review these agreements, as some may include very specific territorial nuances.” So, whether you’re signing up for a traditional franchise, or considering a more flexible remote digital model, understanding the ins and outs of territorial rights is essential for long-term success.With insights fromMaria and Emily, this article will help you navigate the complexities of franchise agreements with confidence. What’s the difference between unit, area development, and area representative franchise agreements? Choosing the right franchise agreement is crucial, as each model impacts liability, compliance obligations, and profit- sharing. “Legal due diligence is essential when determining which structure best suits your ambitions and capabilities,” says Emily. “ A unit franchise agreement grants a franchisee the right to operate a single unit in a specific location,” she explains. “The franchisor retains significant control, and any further expansion requires separate agreements.” By contrast, an area development agreement allows a franchisee to open multiple units within a defined territory over a set period. “While the franchisor still maintains oversight, the focus is on meeting development milestones rather than managing daily operations, with clear performance targets set in the agreement,” she adds. Failing to meet these deadlines can have serious consequences. “If a franchisee falls behind on their development commitments, the agreement may be terminated, and any undeveloped territories annulled,” warns Maria. “That said, this structure can be highly attractive, as it often comes with incentives such as reduced fees or extended development periods, benefiting both the franchisee and the franchisor by accelerating market expansion.” An area representative agreement, also known as a master franchise, operates on a much larger scale – covering a region (such as the North of England) or an entire country (such as France). “The area representative, or master franchisee, is responsible for recruiting sub-franchisees, assigning territories, providing training, and ensuring marketing and operational standards are upheld,” continues Emily. “They may also run their own units. In return, they receive a larger share of franchise fees and royalties, passing the remainder to the franchisor.” This model enables rapid growth but comes with significant responsibilities. “An area representative must handle recruitment, training, and ongoing support, which often requires additional F F R A N C H I S E A G R E E M E N T S 29 WHAT-FRANCHISE.COM Ins ights