By Nick Birbas -
The courts have recently discussed the importance of a franchisor protecting their franchisee’s territorial rights in an exclusive territory. Where a franchisee has an exclusive territory, the courts decided there is a positive obligation that a franchisor does not itself compete in that territory or allow other franchisees to compete. Until now, there have been very few territorial cases in the courts brought by franchisees because of the legal costs and potential damage to the working franchise relationship.
The two most recent decisions – Video Ezy International Pty Ltd v Sedema Pty Ltd [2014] NSWSC 143 (Video Ezy Case) and RPR Maintenance Pty Ltd v Marmax Investments Pty Ltd [2014] FCA 409, (RPR Case) – recognised the franchisee’s exclusive territory and awarded damages against the franchisor. The courts have reinforced the value in the exclusive territory of a franchisee.
