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Increase Your Franchise's
Performance by Understanding its Territories by
P. Williards
Investing into a franchise is a great way to
succeed as a business owner. One of the reasons
for this is that you are often offered exclusive
rights to sell your products and services within
a specified geographic territory. The only
problem with that is franchisors don't usually
live up to their end of the agreement. Not sure
what exclusive territories are? Well, in
business and most notably in the franchising
industry exclusive territories give a business
owner assurance that a direct competitor from
the same franchise won't open up a business
within a certain distance of your operation.
It's one of the first things you should discuss
with a franchisor before you make a decision to
buy into a a franchise. Always know your
franchising territory. Here are some other
details to pay attention to:
* First get a copy of the Uniform Franchise
Offering Circular and read it over, looking for
any rules or regulations on the number of
franchisees allowed to operate in a particular
area. This is usually done geographically or
demographically. You are looking for any type of
information that deals with the rights of
existing franchisees and your rights if one
wants to open near you using the same company
logo and branding. Never sign a contract without
agreeing to some territorial protection.
* The next thing you want to do is find a good
accountant or attorney that can help you assess
the franchise's offer. They can potentially save
you thousands of dollars by keeping you out of a
long term contract that is written in a way that
prevents you from truly succeeding.
* You should think seriously about your
territorial earnings expectations and
projections . Do you think your franchise can
meet those guidelines set for your area? If you
don't, then be aware that your franchisor may
push for new franchisees to be opened in your
designated region before yours even has a chance
to develop. One way to do this by traveling
around your set geographical area to assess the
validity of your delineation. If what you were
approved for won't work, then you need to
negotiate for something better.
* An important aspect of business to remember is
that bigger isn't always better. This holds
especially true for some bigger territories.
Your franchise may cover a large territory but
discover later on that it is under serviced by
the franchise. Think about your business's
capacity when deciding upon an appropriate
territory. I recommend looking at the average
home expenditure figures of a territory and
business saturation levels for your franchise
when creating territories.
* Check to see if your territory holds any
physical barriers that may impede business and
traffic flow. The last thing you want to do is
open up your business at the end of a
non-through road or find that your building
lacks proper street access. These things often
result in lower than expected business and can
be grounds for you to ask for a larger protected
territory.
About the Author
Red Hot Franchises, at www.redhotfranchises.com,
offers franchises opportunities. We feature low
cost franchises, retail franchises, and other
franchise categories.
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