For: Equipment distributors preparing for a manufacturer agreement or renewal.
The decision: Which account, service and exit rights must be clarified before accepting a territory.
60-second answer: Read the executed agreement and amendments as a set. Map who can sell to which accounts, what registration actually protects, who pays for service on direct sales and what happens to stock at exit. A territory label alone does not answer those questions.
Test the agreement against real orders
Pull the signed master agreement, amendments, account lists, registrations, quotations, demonstration records and service tickets for direct-sold units. Choose recent orders where account ownership or compensation was unclear. Trace each through the agreement before negotiating a new definition. A sent registration email is evidence of submission; whether it establishes protection depends on the agreement and applicable law.
| Issue | Question to settle in writing | Business exposure |
|---|---|---|
| Territory and channels | Which geography, customer types, online channels and direct sales are covered? | Investment made without the expected opportunity |
| House accounts | Which accounts are excluded and how can the list change? | Developed accounts reclassified or disputed |
| Registration and credit | What acknowledgment, duration, renewal and split-credit rules apply? | Unpaid development work and compensation disputes |
| Service on direct sales | What scope, authorization, labor, travel and parts terms apply? | Local service cost without the associated sale |
| Exit and stock | What notice, cure, repurchase, sell-off and support provisions apply? | Aging inventory and stranded customer obligations |
Separate the commercial ask from a legal entitlement
Registration periods, service fees and repurchase terms are negotiating subjects, not benefits a manufacturer must universally grant. Document the cost of the proposed obligation and the concession you would exchange for it. A repurchase promise needs a price basis, condition rules, freight allocation, timing and a responsible entity to become useful.
Have qualified counsel review the applicable jurisdiction and dealer relationship, especially termination, exclusivity, noncompete provisions and mandatory dealer protections. The FTC describes exclusive dealing as a context-dependent competition issue. That is not a blanket authorization for every proposed contract term.
Keep competitor coordination out of the solution
A dispute with the manufacturer should follow the contractual escalation process. Do not resolve it by agreeing with competing dealers to divide territories or customers. The FTC warns that plain competitor market-allocation agreements are almost always illegal. Manufacturer-dealer restrictions and agreements between competitors require different analysis.
Ask the manufacturer how national accounts, buying groups, general contractors and online orders are attributed. Does the physical installation address control? Can the distributor be asked to support units sold outside its product authorization? Who pays for work after the agreement ends? Obtain answers before extending customer promises beyond your rights.
Red flags include different account lists held by sales and service, performance targets changed without the agreed process, and stock bought on an assumed buyback. None proves a breach by itself. Record the discrepancy and request a written resolution.
Prepare the renewal file
- Map the clauses against recent disputed or direct-sold orders and quantify unpaid development or service work.
- Rank the requested changes by cash, inventory and customer-support consequence.
- Obtain reviewed written terms and update sales, compensation and service procedures to match the signed result.
Continue with FEX
FEX editorial guidance: the decision tools and operating recommendations in this guide are FEX analysis. They are not manufacturer specifications, contractual entitlements or industry benchmarks.
Source notes
- FTC exclusive-dealing guidance — Competition assessment depends on the arrangement and market context.
- FTC market-allocation guidance — Competitor agreements to divide customers or territories.
Editorial update, October 7, 2026: Removed claims that exclusivity always prevents direct sales, that missing registration language eliminates all rights, and that particular concessions are universally easy to obtain. Retained the distinction between supplier restrictions and competitor allocation.
