Franchise Territory Rights: What 259 FDDs Grant and Reserve

Franchise territory rights are usually partial. In 259 Minnesota-filed FDDs issued 2025 to 2026, 81.1% promise a protected area, but 85.3% print the federal sentence “You will not receive an exclusive territory,” 92.9% of protected areas let the franchisor sell online inside them, and 18.9% grant no protection at all.
The numbers
How franchise territory rights are disclosed in FDD Item 12
Franchise territory rights are disclosed in Item 12 of every Franchise Disclosure Document. The FTC rule (16 CFR 436.5(l), 2026 edition) makes each franchisor state whether the franchise is for a specific location, any minimum territory, relocation and expansion conditions, options or rights of first refusal, whether the territory is exclusive, which sales channels it reserves inside the territory, and any similar business it runs under another brand.
If a franchisor does not grant an exclusive territory, the rule requires a fixed sentence: “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.” FTC staff FAQ 25 reads exclusive territory as an area where the franchisor promises to open neither a company-owned nor a franchised same-brand outlet. A franchisor may still keep online sales and other brands inside an exclusive territory, because Item 12 discloses those separately.
We read Item 12 in 259 FDDs filed with the Minnesota Department of Commerce and coded what each grants and keeps. The sample matches the site’s royalty and agreement terms datasets, so the results can be joined brand by brand.
Territory types: protected, but rarely exclusive
60.2% of 259 Minnesota-filed FDDs issued 2025 to 2026 (156 FDDs) promise a protected area while printing the no-exclusive sentence. 13.5% (35) protect an area without the sentence, the pattern FTC staff guidance reserves for exclusive territories; 7.3% (19) offer limited protection and 18.9% (49) offer none.
The disclaimer is therefore not a sign that no area is protected. Of the 221 FDDs that print it, 173 (78.3%) still promise an area. Labels add to the confusion: 47 FDDs (18.1%) call the area exclusive somewhere in Item 12, and 13 of them also print the no-exclusive sentence. NASAA told the FTC in 2019 that franchisors use terms such as protected territory and limited exclusive territory and asked for plainer disclosure.
Business model matters. 77 service-area franchises (mobile or home-based) almost always receive a territory: only 5 have none. Of 180 site-based franchises, 42 have none.
Territory protection by sector
Protection varies widely by sector. Lodging is the outlier: 14 of 18 hotel FDDs (77.8%) grant no territorial protection (protection offered only at the franchisor’s option counts as none), and 2 more offer only limited protection. Business services (55.6% none), food and beverage (10 of 27, 37.0%) and retail (33.3%) follow. Fitness, health and wellness, home services, pet services and senior care protect every brand sampled.
NASAA wrote in 2023 that for food and beverage franchises a missing territory conflicts with franchisees’ expectation of at least a nominal one. In this sample, 63.0% of food FDDs grant some protection. For context on the food sector see restaurant franchise statistics. Sector counts are 17 to 27 FDDs each, so treat differences of a few brands with care.
| Sector | FDDs | Exclusive | Protected with disclaimer | Limited | None | Any protection (%) | Performance rule, share of protected (%) |
|---|---|---|---|---|---|---|---|
| Fitness | 18 | 3 | 15 | 0 | 0 | 100 | 33.3 |
| Health and wellness | 17 | 5 | 10 | 2 | 0 | 100 | 11.8 |
| Home services | 18 | 3 | 14 | 1 | 0 | 100 | 77.8 |
| Pet services | 18 | 5 | 13 | 0 | 0 | 100 | 16.7 |
| Senior and in-home care | 18 | 1 | 16 | 1 | 0 | 100 | 66.7 |
| Education and children | 18 | 5 | 11 | 1 | 1 | 94.4 | 17.6 |
| Entertainment and recreation | 18 | 0 | 17 | 0 | 1 | 94.4 | 11.8 |
| Cleaning and restoration | 18 | 4 | 10 | 2 | 2 | 88.9 | 50 |
| Automotive | 17 | 3 | 10 | 2 | 2 | 88.2 | 33.3 |
| Personal services and beauty | 18 | 1 | 13 | 1 | 3 | 83.3 | 6.7 |
| Retail | 18 | 2 | 7 | 3 | 6 | 66.7 | 33.3 |
| Food and beverage | 27 | 1 | 13 | 3 | 10 | 63 | 0 |
| Business services | 18 | 2 | 5 | 1 | 10 | 44.4 | 50 |
| Lodging | 18 | 0 | 2 | 2 | 14 | 22.2 | 0 |
How territories are defined
Of the 210 FDDs with any protection, 57.1% describe the territory by a population count, 51.9% by a radius, 42.9% by zip codes and 42.9% by a map or street boundaries. Many combine methods. Household counts (12.9%), business counts (4.3%) and drive time (2.9%) are rare.
85.2% state a number for the standard territory. The rule asks only for any minimum territory granted (436.5(l)(2)), and most numbers are written as typical or minimum figures that the franchisor sets before signing.
How big a franchise territory is
Where a radius is stated, the median smallest radius is 2 miles (79 FDDs; middle half 1 to 3 miles). Where a population is stated, the median smallest figure is 100,000 people (89 FDDs; middle half 50,000 to 250,000).
Site-based franchises use small circles: 78 state a radius, median 2 miles, and their median stated population is 75,000. Service-area franchises use larger population blocks: median 250,000 people across 36 FDDs, or a median 100,000 households where households are used. Urban territories are often smaller and some FDDs measure them in city blocks, which we left blank.
| Business model | FDDs with protection | Stating a radius | Median radius (miles) | Stating a population | Median population | Stating households | Median households |
|---|---|---|---|---|---|---|---|
| Site-based (store, studio, center, hotel) | 138 | 78 | 2 | 53 | 75,000 | 3 | 20,000 |
| Service-area (mobile or home-based) | 72 | 1 | 10 | 36 | 250,000 | 12 | 100,000 |

What franchisors keep inside the territory
A protected area usually blocks only one thing: another same-brand outlet of the same format. Of the 210 FDDs with protection, 92.9% keep the franchisor’s right to sell inside the area online, by catalog or by other direct channels; 91.4% keep the right to run or license businesses under other brands there; and 77.1% keep the right to buy competing businesses or chains that may already operate there.
Non-traditional venues (32.9%) and national or key accounts (30.0%) are reserved far less often. 95.2% reserve at least one of online sales, non-traditional venues or national accounts, but only 4.8% reserve all three. The median protected area carries 3 of the five reserved rights. Only 17 FDDs (6.6%) say the franchisee is paid anything when the franchisor sells into the territory.
Reservations follow FTC guidance. FAQ 37 (2012) says a franchisor that keeps non-traditional venues inside a territory must print the no-exclusive sentence. 39.1% of protected-with-disclaimer FDDs reserve such venues, against 8.6% of exclusive ones. Exclusive grants still keep online sales in 91.4% of cases, which FAQ 25 permits. The FTC’s own sample exclusive Item 12 reserves Internet and catalog sales, and its buyer guide warns that a protected territory may not stop the franchisor selling through its website or other retailers.
| Right reserved inside the territory | Exclusive (no disclaimer) (%) | Protected with disclaimer (%) | Limited protection (%) |
|---|---|---|---|
| Internet and other direct channels | 91.4 | 94.2 | 84.2 |
| Non-traditional venues | 8.6 | 39.1 | 26.3 |
| National or key accounts | 20 | 32.7 | 26.3 |
| Businesses under other brands | 77.1 | 95.5 | 84.2 |
| Acquired competing chains | 51.4 | 83.3 | 73.7 |
Conditions that can shrink or remove a territory
30.5% of protected territories (64 of 210) depend on a minimum performance requirement such as annual gross sales, customer counts or minimum royalties. In 46 FDDs (21.9%) a miss can shrink the territory or remove its protection; others allow termination or a shortfall payment.
33.8% let the franchisor change the territory for other reasons, such as population growth, transfer or its own discretion, and 13.8% say the territory can be redrawn at renewal. The FTC buyer guide also warns that a renewal may reduce the territory. Counting both, 53.3% of protected territories can change during or at the end of the term. Home services and senior care tie protection to performance most often (77.8% and 66.7% of their protected FDDs).
| Item 12 term | FDDs | Share of base (%) | Base |
|---|---|---|---|
| Minimum performance rule tied to the territory | 64 | 30.5 | 210 FDDs with protection |
| Miss can shrink the territory or remove protection | 46 | 21.9 | 210 FDDs with protection |
| Franchisor may change the territory for other reasons | 71 | 33.8 | 210 FDDs with protection |
| Territory can be redrawn at renewal | 29 | 13.8 | 210 FDDs with protection |
| Relocation allowed with franchisor approval | 223 | 86.1 | all 259 FDDs |
| Relocation not permitted | 10 | 3.9 | all 259 FDDs |
| Relocation not addressed | 10 | 3.9 | all 259 FDDs |
| Other relocation rule | 16 | 6.2 | all 259 FDDs |
| Option or right of first refusal on more units | 17 | 6.6 | all 259 FDDs |
| Franchisee may not sell or market outside its territory without consent | 158 | 61 | all 259 FDDs |
Relocation, expansion and selling outside the territory
86.1% of FDDs let the franchisee relocate with the franchisor’s approval; 10 do not permit it. Only 17 FDDs (6.6%) give an option or right of first refusal on more units near the territory. 61.0% stop franchisees marketing or selling outside their own territory without consent, rising to 94.8% of service-area franchises: the territory is a ceiling as well as a floor.
Territory radius vs non-compete radius
Joined to the site’s franchise agreement terms data (Item 17), the non-compete is usually wider than the territory. In the 77 FDDs stating both a protected radius and a post-term non-compete radius in miles, the median largest stated protected radius is 3 miles and the median non-compete radius is 15 miles; the non-compete is wider in 75 of 77. The median ratio is 5.0.
Among the 49 FDDs with no territorial protection, 27 (55.1%) still have a post-term non-compete. The cross-tab is labelled because it joins two separately coded datasets; it does not duplicate the non-compete analysis, which stays in the agreement terms report.
| Territory type (Item 12) | FDDs | Post-term non-compete (Item 17) | Share with non-compete (%) | Non-compete stated in miles | Median non-compete radius (miles) | Non-compete limited to the former territory |
|---|---|---|---|---|---|---|
| Exclusive (no disclaimer) | 35 | 34 | 97.1 | 31 | 15 | 2 |
| Protected, with disclaimer | 156 | 152 | 97.4 | 127 | 20 | 15 |
| Limited protection | 19 | 16 | 84.2 | 14 | 8 | 2 |
| No territorial protection | 49 | 27 | 55.1 | 22 | 10 | 2 |
Federal disclosure, state encroachment rules
Federal law requires disclosure, not protection. In adopting the current rule the FTC declined in 2007 to mandate territorial terms, calling a protected territory a private contractual matter. A few states go further for franchises operated there. Iowa Code 537A.10 gives an existing franchisee a damages claim against a new same-brand outlet in unreasonable proximity unless an exception applies, such as a sales impact under 6 percent or reasonable territorial rights already granted. Washington RCW 19.100.180(2)(f) bars a franchisor from competing in an exclusive territory it specified in the agreement. This is a summary of statutes, not legal advice.
Franchise territory rights checklist for buyers
The data suggests reading Item 12 and the territory section of the franchise agreement with these questions. A franchise attorney can confirm what applies to a given contract.
- Does Item 12 print “You will not receive an exclusive territory”? If so, what exactly is still protected, and against whom (company outlets, franchised outlets, both)?
- How is the area drawn (radius, zip codes, population) and is a map attached before signing?
- Which channels does the franchisor keep inside it: online sales, non-traditional venues, national accounts, other brands, acquired chains?
- Is there a minimum performance requirement, and what happens on a miss: smaller area, lost protection or termination?
- Can the area be redrawn at renewal, on transfer or for population growth?
- How wide is the post-term non-compete compared with the territory (see Item 17)?
- Can you relocate, and do you get any first right to nearby units?
For the wider buying process see buying a franchise and what a franchise consultant does; for costs that scale with territory size see franchise initial investment.
Original analysis: how we calculated it
Territory type mix
- Formula
count of each type / 259 x 100- Inputs
- D005, D007, D009, D011, D001
- Result
- Exclusive 13.5%, protected with disclaimer 60.2%, limited 7.3%, none 18.9%
- Limitations
- Type is coded from two fields; 'limited' needs judgment (19 FDDs); computed by scripts/05_analyze.py from data/fdd_item12.csv
Disclaimer gap
- Formula
disc_prot_n / disc_n x 100- Inputs
- D019, D017
- Result
- 78.3% of FDDs printing the no-exclusive sentence still protect an area
- Limitations
- Protection strength varies; the disclaimer is legally required whenever any same-brand outlet type is reserved; computed by scripts/05_analyze.py from data/fdd_item12.csv
FAQ 37 effect
- Formula
nontrad count / type count x 100, each type- Inputs
- D085, D086
- Result
- Non-traditional venues reserved by 39.1% of protected-with-disclaimer FDDs vs 8.6% of exclusive FDDs
- Limitations
- Association only; other carve-outs (company-owned outlets, acquisitions) also trigger the disclaimer; computed by scripts/05_analyze.py from data/fdd_item12.csv
Typical size where stated
- Formula
median of smallest stated radius and population- Inputs
- D061, D063, D065, D066
- Result
- Median smallest radius 2 miles; median smallest population 100,000 (site-based 75,000, service-area 250,000)
- Limitations
- Only FDDs stating a number; sizes are minimums or typical figures, not guarantees; computed by scripts/05_analyze.py from data/fdd_item12.csv
Reserved-rights prevalence
- Formula
count reserving / 210 x 100- Inputs
- D069, D071, D073, D075, D077, D080, D082
- Result
- Internet 92.9%, other brands 91.4%, acquisitions 77.1%, non-traditional 32.9%, national accounts 30.0%; all three of internet, venues and accounts 4.8%
- Limitations
- Reservations are rights, not evidence the franchisor uses them; computed by scripts/05_analyze.py from data/fdd_item12.csv
Conditional protection
- Formula
either_n / 210 x 100- Inputs
- D090, D093, D095, D097, D099, D048
- Result
- 53.3% of protected territories
- Limitations
- Termination for default is not counted; only Item 12 conditions; computed by scripts/05_analyze.py from data/fdd_item12.csv
Non-compete reach vs protected radius
- Formula
median(nc_post_miles / radius_miles_high) over paired FDDs- Inputs
- D111, D112, D113, D114, D115
- Result
- 5.0 times (median 15 vs 3 miles; wider in 75 of 77)
- Limitations
- 77 of 259 FDDs state both radii; non-compete data from the franchise-agreement-terms dataset; computed by scripts/05_analyze.py from data/fdd_item12.csv
What the data supports, and where it stops
The brief expected most franchisors to grant some protected territory while reserving online sales, non-traditional venues and national accounts inside it, with a meaningful share giving no exclusive territory. The first and last parts hold: 81.1% grant some protection, 85.3% disclaim exclusivity and 18.9% grant nothing. Online reservations are near universal (92.9%). Non-traditional venues (32.9%) and national accounts (30.0%) are not majority practices. The reservations most protected areas share are other brands (91.4%) and acquired chains (77.1%).
Limits: the sample covers brands registered in Minnesota, capped per sector, so it is not a census of US franchisors. Item 12 describes rights, not how often franchisors use them. The ‘limited’ type and several reserved-right fields need judgment; the hand check below measures that error.
In short
- Most franchise agreements protect something: 81.1% of 259 Minnesota-filed FDDs issued 2025 to 2026 promise a protected area in Item 12, and 18.9% promise none.
- Few call it exclusive: 85.3% print the mandated sentence “You will not receive an exclusive territory,” including 173 FDDs that still protect an area.
- Protection is usually against same-brand outlets only: inside protected areas, 92.9% keep online and direct sales, 91.4% keep other brands and 77.1% keep acquired chains.
- Non-traditional venues (32.9%) and national accounts (30.0%) are minority reservations, so the planned angle holds only in part.
- Territories are drawn mostly by population (57.1%), radius (51.9%) and zip codes (42.9%); the median smallest stated radius is 2 miles.
- 53.3% of protected areas can shrink or be withdrawn under a performance rule or another modification right named in Item 12.
- Lodging (77.8% with no protection), business services (55.6%) and food (37.0%) are the least protected sectors; five sectors protect every brand sampled.
What's new
- 2026-10-08: dataset built from 259 FDDs; 181 were issued in 2026 and 78 in 2025 (latest issue date 2026-08-18).
- 2026 CFR edition: 16 CFR 436.5(l) still requires the sentence “You will not receive an exclusive territory” whenever a franchisor does not grant one.
- 2012-10-16, still posted in 2026: FTC staff FAQ 37 says reserving non-traditional venues inside a territory requires that sentence, which helps explain why protected areas carry it.
- 2023-06-08: NASAA told the FTC some systems are designed with no territorial protection; the newest NASAA statement on territories found for this report.
- 2026-02-03: a law-firm article called protected territories the industry norm without counts; this sample puts protected-with-disclaimer grants at 60.2%.
Questions people ask
Do franchises have exclusive territories?
Rarely in the strict sense. In 259 Minnesota-filed FDDs issued 2025 to 2026, 13.5% protect an area without the no-exclusive sentence (exclusive under FTC staff guidance) and 85.3% print “You will not receive an exclusive territory.” Most of those (78.3%) still protect an area against same-brand outlets (Minnesota CARDS FDDs).
What is a protected territory in franchising?
An area where the franchisor promises not to open or license another same-brand outlet, while keeping other rights. 60.2% of 259 Minnesota-filed FDDs issued 2025 to 2026 grant this kind of area. Inside it, 92.9% keep online sales and 91.4% keep other brands (Item 12).
Can a franchisor open another location near me?
It depends on Item 12. 18.9% of 259 Minnesota-filed FDDs issued 2025 to 2026 give no protected area, so the franchisor may place same-brand outlets anywhere (77.8% of lodging FDDs). Inside a protected area the franchisor usually may not, but 32.9% keep non-traditional venues there. Iowa and Washington add limits by statute for franchises operated there.
How big is a franchise territory?
Where stated in 259 Minnesota-filed FDDs issued 2025 to 2026, the median smallest radius is 2 miles (79 FDDs) and the median smallest population is 100,000 people (89 FDDs). Service-area franchises run larger, a median 250,000 people (Item 12).
Can a franchisor sell online in my territory?
Usually yes. 92.9% of FDDs with a protected area keep the right to sell online or by other direct channels inside it, and 6.6% of all 259 FDDs promise the franchisee any payment for such sales. FTC FAQ 25 allows this even in an exclusive territory.
Frequently asked questions
What does 'You will not receive an exclusive territory' mean in an FDD?
It is a sentence 16 CFR 436.5(l)(5)(i) requires when a franchisor does not promise to keep both company-owned and franchised same-brand outlets out of an area. 85.3% of 259 Minnesota-filed FDDs issued 2025 to 2026 print it, yet many still protect an area in part.
What is the difference between an exclusive and a protected territory?
Under FTC FAQ 25, exclusive means no company-owned and no franchised same-brand outlet in the area. A protected area falls short somewhere, for example by reserving non-traditional venues. In 259 Minnesota-filed FDDs issued 2025 to 2026, 13.5% are exclusive and 60.2% protected with the disclaimer.
Why does an FDD say 'no exclusive territory' and then describe a protected one?
Because any reserved same-brand outlet type triggers the sentence. FTC FAQ 37 (2012) covers non-traditional venues; 39.1% of protected-with-disclaimer FDDs in 259 Minnesota-filed FDDs issued 2025 to 2026 reserve them.
Which franchise sectors give the least territorial protection?
Lodging (77.8% with none), business services (55.6%), food and beverage (37.0%) and retail (33.3%) in 259 Minnesota-filed FDDs issued 2025 to 2026. Fitness, health, home services, pet and senior care protected every brand sampled.
How are franchise territories defined?
Among 210 protected territories in 259 Minnesota-filed FDDs issued 2025 to 2026: population count 57.1%, radius 51.9%, zip codes 42.9%, map or streets 42.9%. Most use more than one.
Can I lose my franchise territory if sales are low?
In some systems. 30.5% of protected territories in 259 Minnesota-filed FDDs issued 2025 to 2026 depend on a minimum performance requirement, and in 21.9% a miss can shrink the area or remove protection.
Can the franchisor change my territory at renewal?
13.8% of protected territories in 259 Minnesota-filed FDDs issued 2025 to 2026 say so in Item 12, and 33.8% allow other changes, such as for population growth. The FTC buyer guide warns renewals can reduce territory.
Am I paid when the franchisor sells into my territory?
Seldom. 17 of 259 FDDs (6.6%) in 259 Minnesota-filed FDDs issued 2025 to 2026 promise any compensation, for example a revenue share on certain accounts.
Can I relocate my franchise?
86.1% of 259 Minnesota-filed FDDs issued 2025 to 2026 allow relocation with franchisor approval; 10 do not allow it.
Do franchisees get first rights to open more units nearby?
Few do. 17 of 259 FDDs (6.6%) in 259 Minnesota-filed FDDs issued 2025 to 2026 grant an option or right of first refusal on additional franchises; most say no such right exists.
For journalists
Most quotable statistics
85.3% of 259 Minnesota-filed FDDs issued 2025 to 2026 tell buyers “You will not receive an exclusive territory,” yet 78.3% of those still promise a protected area.
Item 12 of 259 Minnesota CARDS FDDs18.9% of 259 Minnesota-filed FDDs issued 2025 to 2026 grant no territorial protection at all.
Item 12 of 259 Minnesota CARDS FDDs92.9% of protected franchise territories in 259 Minnesota-filed FDDs issued 2025 to 2026 let the franchisor sell online inside them.
Item 12 of 259 Minnesota CARDS FDDs77.8% of hotel FDDs in the 2025 to 2026 Minnesota sample grant no territorial protection.
Item 12 of 259 Minnesota CARDS FDDs53.3% of protected territories in 259 Minnesota-filed FDDs issued 2025 to 2026 can shrink or disappear under a performance rule or franchisor modification right.
Item 12 of 259 Minnesota CARDS FDDsIn 77 FDDs stating both, the median post-term non-compete radius (15 miles) is 5.0 times the protected radius (3 miles).
Item 12 of 259 Minnesota CARDS FDDs
If you cite only a few, cite these
- 81.1% of 259 Minnesota-filed FDDs issued 2025 to 2026 protect an area; 18.9% protect none. source
- 85.3% print “You will not receive an exclusive territory”; most still protect an area. source
- 92.9% of protected areas keep online sales for the franchisor. source
Press summary and suggested headlines
Franchise territory rights are narrower than their labels suggest, according to a review of Item 12 in 259 Franchise Disclosure Documents filed in Minnesota and issued in 2025 and 2026. 81.1% of the documents promise some protected area, but 85.3% print the federally required sentence "You will not receive an exclusive territory," and 173 of those still protect an area. Inside protected areas, 92.9% keep the franchisor's right to sell online, 91.4% keep other brands and 77.1% keep acquired competitors. 18.9% grant no protection at all, led by lodging at 77.8%. The median smallest stated territory is 2 miles or 100,000 people, and 53.3% of protected territories can be cut by performance rules or modification rights. The sample takes one FDD per brand across 14 sectors from the Minnesota Department of Commerce CARDS database, and the brand-level dataset is published under CC BY 4.0.
Suggested headlines
- Most franchise FDDs disclaim exclusive territories, then protect one anyway
- 92.9% of protected franchise territories let the franchisor sell online inside them
- Nearly four in five hotel FDDs give franchisees no territorial protection
- More than half of protected franchise territories can shrink under performance or modification clauses
- Franchise non-competes reach 5.0 times further than the territory they protect
Methodology
Sample. The study reuses the 259-brand sample of the franchise royalty rates dataset: one FDD per brand from Minnesota CARDS, issued 2025-01-24 to 2026-08-18 (181 in 2026, 78 in 2025), sampled at random within sector caps of 18 brands (27 for food). The PDFs were converted with pdftotext -layout; no document was re-downloaded.
Extraction. A script located each FDD’s Item 12 (from the Item 12 heading to the Item 13 heading) and wrote a reading digest. Nine readers coded every brand against a written codebook (data/extraction_codebook.md), opening the full text where Item 12 pointed to the franchise agreement. Unit: the standard single-unit franchise; development, area and master rights were ignored. A regex draft matched the hand-read no-exclusive sentence in 96.5% of brands but the right-of-first-refusal flag in only 22.0%, because wording such as “no right of first refusal” looks like a grant to a parser; that is why every brand was read.
Territory type. Coded from two fields: whether Item 12 prints the mandated sentence and whether the franchisor promises no same-brand outlet in a defined area (yes, limited, no). Protection offered only at the franchisor’s option was coded as none; a promise covering only franchised (not company-owned) outlets, a first right, a time-limited area or a radius that may be zero was coded limited. A consistency review applied these rules across readers and changed 11 values (data/review_corrections.csv).
Accuracy. We hand-checked a random 20 brands (fixed seed), 18 fields each, against the Item 12 text: 3 of 360 fields were wrong (0.8%): one optional hotel protection coded limited instead of none, one missed acquisition reservation and one conditional no-exclusive sentence. All three were corrected (data/handcheck.csv). Reader confidence: 165 high, 91 medium, 3 low.
Derived metrics. Shares use all 259 FDDs unless the base is the 210 FDDs with any protection. Sizes are the smallest stated figure per FDD; medians and quartiles use only FDDs stating a number. The non-compete cross-tab joins Item 17 fields from the franchise agreement terms dataset on the Minnesota file number. Every number is reproducible from scripts/05_analyze.py; derived.csv lists formulas and input rows.
Conflicts and limits. Where Item 12 contradicted itself, readers recorded the standard format’s operative promise and explained it in notes. The fields for branded products in other stores and for channel compensation were coded less consistently across readers and are reported only in the CSV or with that caveat. Reserved rights are rights, not evidence of use. The sample is limited to brands registered in Minnesota. Last updated 2026-10-08.
Sources and source quality
Tier 1: primary and government sources (11)
- Minnesota CARDS franchise registrations (259 FDDs linked in data/fdd_item12.csv), Minnesota Department of Commerce (accessed 2026-10-08)
- 16 CFR 436.5(l), Item 12 Territory (2026 edition), U.S. Government Publishing Office (accessed 2026-10-08)
- Amended Franchise Rule FAQs (FAQ 25 and FAQ 37), Federal Trade Commission (accessed 2026-10-08)
- Franchise Rule Compliance Guide (2008), Federal Trade Commission (accessed 2026-10-08)
- A Consumer's Guide to Buying a Franchise (2020), Federal Trade Commission (accessed 2026-10-08)
- Franchise Rule final rule and Statement of Basis and Purpose, 72 FR 15444 (2007), Federal Trade Commission (accessed 2026-10-08)
- Comment letter on the Franchise Rule regulatory review (May 13, 2019), North American Securities Administrators Association (accessed 2026-10-08)
- Comment letter on FTC RFI, Docket FTC-2023-0026 (June 8, 2023), North American Securities Administrators Association (accessed 2026-10-08)
- Iowa Code 537A.10, Franchise agreements (2026), Iowa Legislature (accessed 2026-10-08)
- RCW 19.100.180, Franchise Investment Protection Act, Washington State Legislature (accessed 2026-10-08)
- FDD Item 17 dataset, 259 Minnesota FDDs (franchise agreement terms report), Franchise Consultants and Brokers (accessed 2026-10-08)
Tier 3: journalism and commentary (1)
- Exclusive vs. Protected Franchise Territories (February 3, 2026), Varnum LLP (accessed 2026-10-08)
How to cite and reuse
Franchise Consultants and Brokers Editorial Team. "Franchise Territory Rights: What 259 FDDs Grant and Reserve." Franchise Consultants and Brokers, updated October 8, 2026. https://franchiseconsultantsandbrokers.com/research/franchise-territory-rights/
The data tables and charts on this page are licensed under CC BY 4.0. Please credit “Franchise Consultants and Brokers, franchiseconsultantsandbrokers.com” with a link to this page.
Download the data
- Brand-level Item 12 dataset, 259 FDDs (CSV)
- Territory type by sector (CSV)
- Territory size by business model (CSV)
- Reserved rights by territory type (CSV)
- Territory conditions (CSV)
- Non-compete by territory type (CSV)
- Definition methods (CSV)
- Reserved rights, all and protected (CSV)
- Full fact sheet with sources (CSV)



