When evaluating a franchise opportunity, the standard business advice of “location, location, location” still applies. However, beyond individual locations, many franchisors also assign territories that the franchisees can operate within. A territory can be defined through a zip code, city, or town and allows the franchisor to create geographical boundaries within their network.

Knowing what type of territory agreement a franchisor offers allows you to anticipate possible future scenarios, such as the possibility of the franchisor partnering with a vendor in your community, or other franchisees in your network opening in the same boundary. There are benefits and downsides to all types of franchise territories, but it is important to be aware of the different types before proceeding with a franchise opportunity.


Aptly named, an exclusive territory is when a franchisee has the exclusive right to run their franchise business within the pre-determined boundary without internal competition from other franchisees in their network. If you were to think of the different types of territories in a hierarchy, an exclusive territory would be at the top, offering the highest level of protection from internal competition.

Of course, this doesn’t wipe out other industry competitors from opening within your territory, but it does allow a franchisee the opportunity to build strong relationships with their customers without another franchisee from the same brand competing for the same type of audience.

If the franchise system you’re interested in investing in offers this type of territory, be sure to verify how they define exclusivity, as the boundary could be small, and whether certain situations could nullify this agreement.


A protected franchise territory includes several similarities with an exclusive franchise territory, but the difference exists with the franchisor’s rights. Franchisees within a protected territory have the same type of protection, where another franchisee from the same network cannot open their location in the same pre-determined boundary. However, the franchisor reserves the right to open a location in the territory which would belong directly to the franchise business. This type of territory also allows the franchisor to sell products through a vendor, for example, within a franchisee’s territory.

This type of territory can open the door for a collaboration between the franchisee and franchisor within one specific market, which franchisees may find beneficial.


As you might have already guessed by the name, a franchise system offering an open franchise territory to their franchisees means they do not have certain geographical restrictions. Rather than creating a pre-established boundary around each location, it is open for any franchisee within the same system to start operating their business within a franchisee’s zip code, town, city, etc. Similar to a protected territory, this type of territory also means a franchisor-owned location can open and/or they can start selling products through a vendor.

This type of territory is also known as non-exclusive because the franchisee does not hold the exclusive right to operate their franchise business and sell the products/services to a market in a geographical area. Without territory restrictions, franchisees could benefit from increased brand recognition and the opportunity to expand in other towns and cities. However, it can also mean greater competition (though most franchisors want their locations to succeed, and would likely not allow multiple locations in the same territory unless they believed each could find a sustainable customer base).


The decision lies in your hands, as you want to ensure the franchise system you invest in aligns with your business goals. You may find franchisors provide a plan as to how they define their territories and how they handle competition that makes sense within a particular industry, so uncovering all aspects of the franchise opportunity can give you a clearer image of the path to success.

It is also important to remember that franchisors have already established a successful business model and want each franchisee in their network to thrive. Therefore, it can be important to remain open to all types of territories as each one has its own advantages that can help your location prosper.

If you are interested in bringing a Dogtopia to your community, check out our Why Dogtopia? page for details on why this may be the right opportunity for you.