Are all franchise trading territories protected?

Absolutely not. Most lawyers recommend to their franchisor clients that they should not grant exclusive territories to franchisees because it can be difficult to terminate a franchise agreement for a franchisee’s underperformance. It is usually much simpler to take the commercial option of putting in another franchisee to satisfy customer demand.  Clearly prospective franchisees look for some sort of protection and, therefore, it is easier to sell franchises with territorial protection than without. For this reason, franchisors do often give some sort of territorial protection. In about three quarters of franchises, franchisees receive this protection.  Precisely what territorial protection a franchisee receives from a franchisor depends on the express wording of the franchise agreement - not all ‘exclusive’ territories give franchisees the same degree of exclusivity. Technically there is a distinction between the grant of sole rights (which does not prevent the franchisor itself from competing in a franchisee’s territory) and exclusive rights (which does). In any event, it is generally illegal to prevent a franchisee from responding to unsolicited inquiries from a customer outside that franchisee’s territory, so exclusivity is never quite as exclusive as franchisees would want.