Written by : Neerja Shukla
Business franchising arrangements are usually conducted on the basis of a particular geographic area or territory. The franchisee breaks up the licensing of his business between different franchising territories, to ensure there’s no overlap of competition between franchises and to geographically grow the business nation wide or even world wide. Usually, the territory you are assigned is yours with exclusivity against any other business franchising agent that might otherwise move in to your area. This ensures your business franchising opportunity is given a chance to grow within your local area without having to compete with other franchisees. But how important are business franchising territories, and does it matter which territory you are assigned?
Business franchising territories are a handy way of dividing up franchising licenses. Rather than sending a dozen franchisees out into the world without consideration as to where they would operate would be difficult, and thus business franchising territories can be a great way to divide up the rights and responsibilities of each particular franchise. Business franchising territories are also beneficial for the franchisees, as a means of confirming their particular operating area and on their rights and responsibilities as regards that geographic area.
Business franchising territories, although obviously important from a practical point of view, are absolutely critical to the success of your business. If you were selling, say, cups of coffee to passing pedestrians, the territory you’ve been assigned will determine whether you can shift 100 or 10,000 cups every morning, depending on the physical number of people in the area – it’s that important to your business success. But in a number occasions, franchisees are given no choice over the exact territory of their business franchising agreement. In the event that there is a choice, it’s important to research which area would be most beneficial to the success of your business, and to come up with solid business reasons for selecting a particular territory.
Take this one step further, and before signing up to any business franchising agreement conduct some market research within the territory you will be assigned. Get down to the area and ask passers by whether or not they’d like to see your franchise in the area, and whether or not they’d be likely to make use of your franchise, were it located in that territory. That way, you can become more clued up about the potential market within your particular territory to determine whether or not your business franchising agreement will provide good value for money.
Business franchising territories are obviously an important part of the business franchising agreements, and they can also make a significant difference to the success or failure of your business. Where a choice of territories is available, it’s perhaps best to consider your options carefully, and it’s certainly a crucial consideration when reviewing any business franchising opportunities. However, provided there is a market available within your local area for the product or service offered by the business franchising license, you should be able to make the most of any territory to which you buy business franchising rights.