Exclusive Territory Agreements for Hyperbaric Chamber Distributors: What a Real One Looks Like

Bottom line up front. An exclusive territory is not a gift from the manufacturer. It is the price a distributor pays for real, unrecoverable investment — a demo unit in the showroom, a technician who can fix the chamber at 2 a.m., a spare-parts shelf in a back room, a year of demonstrations. If a brand is handing out "exclusive" without a checklist for what the distributor has to do, what the manufacturer reserves for itself, and what happens when either side slips, it is not really exclusive. It is a quiet way of asking a small business to bet its year on a handshake.

The phrase "exclusive territory" hides three questions that almost no one answers

If you google "exclusive territory agreement," the first page of results is mostly generic B2B guides. They tell you "exclusive" means the supplier agrees not to appoint another distributor in the area. That is one third of the answer. The other two thirds — what the manufacturer keeps the right to do, and what the distributor has to hit for the exclusivity to stay in place — are where every dispute we've ever read about actually starts.

The general guides will say "vague terms like 'Europe' or 'Asia Pacific' are the root cause of most territory disputes." That is true. But they will not tell you what to do about it. So we will, because we wrote our own agreement to handle this and we think it is worth sharing.

The three questions any serious distributor should ask before signing — and that any serious manufacturer should answer in writing — are:

• Question 1: What am I getting exclusive rights to? Sales in the territory? Installs? Service? Spares? All of the above, or only some?

• Question 2: What does the manufacturer keep? Direct-to-customer website sales? Government and hospital accounts? Pre-existing named accounts? Exports? E-commerce through Amazon-style marketplaces?

• Question 3: What happens if I miss my numbers? Does the manufacturer terminate me, or does the agreement step down to non-exclusive and we keep working together?

Most agreements we have read skip Question 2 entirely. A few skip Question 3. Almost none answer Question 1 in plain language with a two-column list. We do, and it is the first thing we put on our product and territory overview page.

Five clauses that signal a serious program

Here is the short version of how we structure exclusive territory clauses. We are not publishing our actual agreement. We are publishing the logic so you know what to ask for and what to push back on.

1. We name every carve-out, and we tell you why

A "carve-out" is the list of things the manufacturer keeps the right to do even inside an otherwise exclusive territory. Common ones: the brand's own website, government and hospital accounts, pre-existing named accounts, e-commerce through third-party platforms, exports.

Most brand agreements either leave carve-outs out entirely (which sounds generous and is actually a lawsuit waiting to happen) or bury them in section 14 with no explanation. We list them in plain English on the territory page, and for each one we say why we keep it.

Example of how the table reads:

The reason this matters: most disputes in distribution agreements happen because the distributor believes the word "exclusive" means everything, and the manufacturer believes it means what it literally said. Naming the carve-outs in writing, and the matching rules for what the distributor must not do, is the only thing that prevents that disagreement.

2. We tell you what happens when a customer outside your territory finds us first

Inbound lead from outside your region is the single most common point of friction in any distribution relationship. The general guides do not address it. Most brand agreements are silent on it. We handle it in three sentences:

If an inbound lead comes through our website or our trade-show booth from outside your territory, we route it to the territory partner for that region. If there is no territory partner yet, we route it to the geographically nearest partner or run it direct. We do not run "shadow" sales inside a partner's territory.

That sentence does three things. It tells existing partners they will not be undercut by their own brand. It tells prospective partners that leads are not going to be cherry-picked. And it gives the manufacturer a clean default for the awkward middle case (lead comes in, no one is signed up yet).

3. We do not require you to come from the medical-device world

This one is unusual. Read most "become a distributor" pages in this industry and the ideal-partner profile reads like a hospital-procurement job description: capital medical equipment experience, established relationships with top hospital facilities, capital ready to commit, regulatory sophistication. That profile describes about two percent of the people who actually sell hyperbaric chambers to gyms, wellness studios, sports-recovery practices, hospitality groups, and home users.

So we will say this out loud: we do not require hospital relationships. We do not require you to have sold medical devices before. The non-medical hyperbaric chamber market is its own world. The right partner in that world is usually someone with local service capability, a commercial network in their region, a place to demonstrate the chamber, and the willingness to invest in operator training. If that is you, we want to talk to you. If you also happen to have hospital relationships, great, but we will not make that the price of admission.

This is also why we do not have "exclusive territory" as the default arrangement. For light-asset channels (a regional gym chain, a wellness studio operator, a hospitality group buying for one location) we usually recommend a non-exclusive or sole-distributor setup. Exclusive territory makes economic sense only when the partner is making a heavy, unrecoverable investment — a service team, a spare-parts shelf, a demo unit, year-one sales infrastructure. If you are not making that investment, the protection is not doing you any favors, and the supplier is taking on risk it cannot justify. We say that in writing because pretending otherwise is how the industry gets its bad reputation.

4. We pay our former partners to keep honoring warranties after termination

This is the clause we are proudest of, and it is also the one that is most often missing in the agreements we have read. The general literature on distribution agreements identifies termination, inventory buyback, and post-termination obligations as common trouble spots, and the standard answer is "address them in the contract." Few contracts do.

Before we get to the post-termination half, here is how the during-term side works, because most brand pages we have read skip it entirely. Inside the term: you handle the first-call customer touch. We give you a published response-time target ({{X}} business hours for the first reply, {{Y}} business days for an on-site visit where the unit is in warranty), a spares-and-freight allocation that says who pays for what, and a published labor rate we pay you for warranty work performed under our service number. The split is in writing because it is the single most common thing the agreement does not say and the dispute almost always turns on.

Our post-termination treatment is just as simple:

If the agreement terminates for any reason other than your material default, you keep the right to perform warranty service on the units you sold for {{N}} months after termination. We pay you for that service at {{published rates}}, including travel. We do not reassign those units to a new partner until the warranty window closes.

The reason we wrote this clause is not generosity. It is that we manufacture capital equipment with a long service life. Customers we sold through you five years ago still need a technician who knows the chamber. If we terminate the relationship and there is no plan for those customers, somebody gets hurt — either the customer or the new partner we appoint. So we plan for it.

This clause also quietly handles another problem the general guides mention but do not solve: parts supply after a model is discontinued. We commit to {{N}} years of critical-spares supply after the last unit ships, regardless of the distribution relationship. If the relationship ends and you still have a customer with a chamber we no longer make parts for, that customer is not your problem to solve.

5. We do not believe that missing a target is the same as failing

This is the clause that separates a serious program from a marketing brochure. Most "exclusive territory" pages we have read say some version of "minimum purchase obligations apply." Almost none say what happens when the minimum is missed.

We use a four-step ladder, in this order:

1. Written notice. Quarterly review. If you fall below {{X}}% of your annual minimum, we send a written notice with the gap calculated and a copy of the data.

1. Cure period. You have {{60}} days to submit a remediation plan. During the cure period, your territorial protection does not change.

1. Step-down to non-exclusive. If the gap is still there after the cure period, the exclusivity converts to non-exclusive. You keep the relationship, you keep the customer base, you keep the warranty obligation — you just lose the territorial protection. We can appoint a second partner in the region.

1. Termination. Termination is the last step, not the first. It happens only if the relationship is no longer workable after the step-down.

The most important sentence in this clause is the one we say out loud:

Losing exclusivity is not the same as losing the relationship. If you step down, you are still our authorized distributor. You still have full warranty, parts, training, and lead-routing support. You just cannot prevent us from adding a second partner in the region.

We added that sentence because every distributor we have ever talked to about performance minimums asks the same unstated question: "If I miss, do you kick me out?" The honest answer is no, but the honest answer also does not fit in a single sentence in a standard agreement. So we put it in writing.

The other unstated question is the mirror image: "What if I want out?" We have read plenty of distribution agreements that explain in detail how the manufacturer can terminate the partner, and never say a word about how the partner can terminate the manufacturer. Ours goes both ways. Either side can give {{N}} days' written notice for any reason other than material default. Unsold inventory you can run off during a wind-down window of {{60–180}} days, or buy back at the agreed formula. Active warranties you keep servicing under clause 4 until they expire or we transition them. The reason this matters is not the legal symmetry — it is the signal. If the agreement only tells you how we can leave you, it tells you what the relationship is.

The agreement checklist

If you are evaluating a distribution agreement right now, here is the minimum that any serious one should contain. If your agreement is missing any of these, it is not a serious agreement — it is a placeholder.

• Carve-outs are listed in plain language, and each carve-out has a reason.

• Cross-territory diversion is forbidden in writing, with a defined process for what happens when a customer from outside your region contacts you anyway.

• During-term service-level commitments are in writing: who fields the first call, the response-time target, the on-site target, the spares-and-freight split, and the labor rate the manufacturer pays the partner for in-warranty work.

• Inbound lead routing is described in writing, including what happens when a lead arrives from outside any partner's territory.

• Performance minimums are stated as a calculation, not as a number pulled from a competitor's website.

• Missing the minimum triggers a step-down to non-exclusive before any termination is on the table.

• Termination is symmetrical: the partner can exit on notice with the same wind-down and warranty handoff the manufacturer would receive.

• Post-termination warranty and parts supply are committed in writing, including how the manufacturer pays the outgoing partner for warranty work and how long the parts obligation lasts.

• A separate Quality Agreement is attached, defining who owns complaint handling, recalls, and field-safety reporting, so the partner is not personally on the hook for a manufacturing or regulatory matter.

If your agreement has these, you have a real agreement. If it does not, you have a placeholder that someone will need to renegotiate in two years.

What we do not do, and why

A few things we deliberately do not put in our agreements, and the reasons we think you should know about them:

• We do not charge an upfront franchise fee. This matters because the U.S. FTC Franchise Rule looks at substance, not at what the agreement is called. If you are paying a fee, using our trademark in a way that creates customer association, and we are exercising significant control over your operations, the agreement may legally be a franchise — with all the FDD (Franchise Disclosure Document) and state-registration obligations that come with that. (FTC, Franchise Rule 16 C.F.R. Part 436 Compliance Guide). We deliberately keep the relationship out of franchise territory.

• We do not coordinate pricing or territories among our distributors. We do not have "agreements" about price floors. Our MAP policy, if we have one for a specific product line, is a unilateral manufacturer policy that restricts only advertised prices, not sale prices, and is enforced consistently. (FTC, Manufacturer-imposed Requirements). That is a real legal line and we stay on the right side of it.

• We do not publish commission percentages or wholesale price ladders. That is industry standard for good reason. Public, comparable pricing terms across distributors can create antitrust exposure, and they also destroy your negotiating leverage. We publish the logic of how terms are set; we do not publish the numbers.

A note on medical-device positioning

We build non-medical, wellness-class chambers. We do not market them for the treatment, cure, or diagnosis of any condition. They are not FDA-cleared for any medical use other than the limited indications for which soft-sided chambers at low pressure have received clearance (such as altitude sickness). For any other use, including general wellness, athletic recovery, or sleep support, the chamber is being used off-label, and the safety and effectiveness of those uses has not been evaluated by the FDA. We say this out loud because the line between "wellness device" and "medical device" in the U.S. depends on the actual claims and the intended use, not on the marketing label (FDA, General Wellness: Policy for Low Risk Devices; 21 CFR § 868.5470, hyperbaric chamber; FDA, hyperbaric chamber product classification (CBF)). Anyone evaluating a hyperbaric chamber for purchase should ask for the manufacturer's written regulatory position, not the marketing tagline.

Our distribution agreements include a Quality Agreement as a separate attachment. That attachment defines the split between us and the partner on regulatory responsibility — which of us owns the complaint handling process, which of us owns the recalls, which of us owns the safety-monitoring reports to the FDA if required, and how we coordinate if an issue surfaces in the field. We do this in writing because the FDA will ask about it during an inspection, and because the partner needs to know that they are not personally liable for a manufacturing defect or a regulatory action we did not tell them about. If you are evaluating a distributor for a hyperbaric chamber, ask for the quality agreement. If the manufacturer does not have one, or refuses to share it, that is a strong signal to walk away.

Frequently asked questions

Q: What's the difference between an exclusive, sole, and non-exclusive territory?

A: Exclusive means you are the only distributor and the manufacturer does not sell directly in the territory. Sole means you are the only distributor but the manufacturer may sell directly. Non-exclusive means the manufacturer can appoint other distributors in the same territory. Sole is a useful middle ground when the manufacturer wants to keep direct sales to strategic accounts while still giving you a protected position.

Q: Can an exclusive distribution agreement become a franchise under U.S. law?

A: Yes, regardless of what the agreement is called. The FTC Franchise Rule looks at three elements: trademark use, significant control or assistance, and required payment. If all three are present, the agreement is treated as a franchise, with FDD and state-registration obligations (FTC Franchise Rule Compliance Guide).

Q: How do I prevent the manufacturer from appointing a second distributor in my territory?

A: You cannot prevent it if your agreement says non-exclusive. If it says exclusive, the answer should be in writing: there is either a step-down provision tied to your performance minimums, or there is a termination clause. If neither exists, the word "exclusive" is doing no work.

Q: What should happen to unsold inventory and active warranties if the agreement terminates?

A: Unsold inventory should be handled in one of three ways, chosen at signing: you buy it and sell it through, you sell it off during a wind-down period of typically {{60–180}} days, or the manufacturer buys it back at an agreed formula. Active warranties should survive termination, with the outgoing partner continuing to perform warranty service for a defined period and being paid for it at published rates. Anything that is not in writing is a dispute waiting to happen.

Q: Is exclusive distribution legal in the United States?

A: Yes, exclusive distribution is not per se illegal under U.S. antitrust law. It is generally evaluated under the rule of reason, considering market power, foreclosure, and procompetitive justifications. The DOJ has described arrangements affecting less than approximately 30 percent of the relevant market as typically falling within a safe harbor, though that figure is informal guidance, not a statutory threshold (DOJ, Single-Firm Conduct Under Section 2 of the Sherman Act, Ch. 8). Any nationwide exclusive arrangement should be reviewed by counsel.

How to talk to us

If you have read this far and your next thought is "OK, I want to see whether we are a fit," the right next step is a 30-minute call with our channel team. We will not pitch you. We will walk you through which of our product lines fit your region, what the realistic first-year economics look like, and whether an exclusive or non-exclusive arrangement makes sense for the kind of partner you actually are. We will tell you honestly if we are not the right brand for you.

Book a 30-minute channel call — we answer within two business days.

Disclaimer. This page is a commercial overview of how we structure our exclusive territory agreements. It is not legal advice and does not constitute an offer. The actual terms of any distribution relationship are governed by the signed agreement. Antitrust thresholds cited above (such as the ~30% market-share figure) reflect informal guidance from the DOJ, not statutory safe harbors, and any nationwide exclusive arrangement should be reviewed by counsel. Chamber specifications and regulatory classifications referenced above reflect publicly available FDA materials; the regulatory status of any specific chamber is determined by the manufacturer's filings and labeling, not by marketing copy.

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