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Who owns a franchisee’s client list?
The first point to remember is that clients, as opposed to client lists, do not belong to anyone. Clients are free to purchase goods or services from whoever they choose. That having been said, franchisees are normally restricted by the terms of their franchise agreement from dealing with clients otherwise than through their franchise, so that during the term of their franchise they cannot contract with clients except through the franchise. When the franchise is terminated they must no longer, at least for a period of time (usually 12 months), have dealings with those clients. As for the client list, that belongs to the franchisee who has prepared it. Again, this is subject to the terms of the franchise agreement, which would normally require the franchisee to make the client list available to the franchisor, subject to any data protection legislation. The obligation to provide the client list is normally applicable both during the term and on termination. Franchisees are required to hand over client lists on termination to enable the franchisor, neighbouring franchisees or any new franchisee to contact the clients.
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