Final answer:
In a franchise contract, the territory to be served is typically determined by the franchisor to maintain brand consistency and avoid competition between franchisees.
Step-by-step explanation:
In a franchise contract, the determination of the territory to be served is typically made by the franchisor. The franchisor is the individual or company that established the franchise and holds the rights to the brand, business model, and trademarks. They have the authority to define the geographic area where a franchisee can operate.
This is done to ensure that multiple franchisees do not overlap and compete in the same market. The franchisor wants to maintain a strong and consistent brand presence and avoid cannibalization of sales. By specifying territories, the franchisor can also ensure that each franchisee has a fair opportunity to serve their designated market.