how to choose the best franchise territory

Choosing The Right Territory When Buying A Franchise

• Size of Population One of the key elements to running a successful franchise is the size of the population within your designated area. ...
• Location Characteristics When choosing a franchise territory, it’s essential to consider what characteristics apply to the location. ...
• Customer Profile When Buying a Franchise ...
• Contact Us ...

Full Answer

How do I choose a good franchise location?

Selecting the Ideal Location for Your FranchiseDemographics. Your franchise can't operate well if there are no customers to take advantage of your services. ... Traffic Counts. What is the overall potential traffic flow for this location? ... Access and Visibility. ... Surrounding Competition. ... Potential Synergy. ... Property Value.

How is a franchise territory determined?

The fastest, simplest and most cost-effective way to define franchise territories is to use existing administrative boundaries, such as zip codes, townships or states.States.Counties.Towns/Townships.Municipalities.Zip codes.

What are the key criteria for selecting a franchise?

6 days agoWhat are the criteria for selecting a franchise?SELECTING A FRANCHISE Your Abilities Costs Demand Competition Brand name Training & Support Expansion Plans Franchisor's Experience.• How much money will this franchise cost before it becomes profitable?More items...

Why is it important for a franchise to have a specific territory?

Some franchisors grant "exclusive territories" to franchisees. This gives franchisees an opportunity to control a specific area, and to assure them that no other franchises will be sold in their territory.

Is the location of a franchise important?

If you're wondering why franchise site selection is so important, the first answer is visibility. When a location is hard to see or find, it's going to significantly limit how many people come to it. A poor location that's hard to access can even discourage potential customers who were planning to come.

What is a normal franchise percentage?

Franchise royalties range from 4% of your revenue all the way up to 12% or more. The amount has to do with the type of franchise business. For example, a food franchise is a high-volume business. A lot of individual items are purchased by a high-volume of customers.

What are the five qualities of a good franchise?

5 characteristics of a good franchiseeAbility to follow instructions. The foundation of the franchise model is that all franchisees follow the same system, offering the same products and services in their respective territories. ... Adaptable to change. ... Driven. ... Similar qualities to franchisor. ... Forward-thinking.

What are three 3 points that should be considered prior to buying a franchise?

What Should I Consider Before Buying a Franchise?The type of experience required in the franchised business.The hours and personal commitment necessary to run the business.The track record of the franchisor, and the business experience of its officers and directors.How other franchisees in the same system are doing.More items...

What are the 4 types of franchise arrangement?

Below are four types of agreements franchised businesses commonly form.Single-Unit Franchise Agreement. In a single-unit agreement, the arrangement grants the franchisee the right to open and operate a single franchise unit. ... Multi-Unit Franchise Agreement. ... Area Development Franchise Agreement. ... Master Franchise Agreement.

What are the seven factors to be considered in deciding to choose a specific franchise?

Before choosing a franchise, take the time to consider these 10 vital signs that the company is the right fit for you.Proven sales record. ... Growing market. ... Competition. ... Repeat business. ... Healthy living. ... Upsell opportunities. ... Profitable business model. ... Personal interest.More items...

What is the most important element of franchise?

Brand consistency and service consistency across multiple franchise outlets are key factors in running a successful franchise business. Establish strong standard business processes and practices which will enforce consistency across all of the franchise outlets.

Can a franchisor change the franchise territory?

If the franchisee decides that they do not want to exercise their option to add a vehicle, the franchisor typically has the right to take back some of the geographical territory and/or postal codes and reallocate them to a new franchisee.

What is a territory franchise?

When a franchise is being sold with an exclusive territory this means that the franchise agreement will contain details of an exclusive area in which the franchisor will not set up another franchise to compete with the franchisee that holds that territory.

Who selects the location of your business?

There is usually a team approach to finding the location and negotiating and finalizing the lease. The team consists of you, the franchisor, a local commercial real estate broker and a good lease attorney. Most franchisors provide you with specific selection criteria for finding a good site.

Can the franchisor change the territory?

Your Franchisor Can Reduce (or Eliminate) Your Territory. In some cases, franchisors will reserve the right to reduce franchisees' territory (typically by an undisclosed amount) or even eliminate franchisees' territorial rights if they fail to meet their contractual obligations.

Can a franchisor change the franchise territory?

If the franchisee decides that they do not want to exercise their option to add a vehicle, the franchisor typically has the right to take back some of the geographical territory and/or postal codes and reallocate them to a new franchisee.

How to Evaluate Franchise Territory Location?

Under your franchise agreement, the level of protection that you may or may not be given varies from one franchisor to another, and most of the time, it depends on the market and business model.

Why should you take territories and exclusivity seriously when establishing a franchise?

After all, territories help determine the potential to earn, because they contain the desired customers of a franchisee. However, as franchising has become so competitive, with similar franchises attracting the same consumers, franchisees do not have to compete with other franchise owners within their own brand.

How Is The Size Of A Franchisee Territory Determined?

Keep in mind that these customers may be defined simply by total population, the population of a certain age group, number of owner-occupied homes of a certain kind, total number of small businesses, number of a certain form of business, or even number of households with gardens, young children or pets.

Why do franchisees have exclusive territories?

In case two or more of the same brand outlets are in the same territory, franchisees have the opportunity to start competing for the same customer base , depending on the market model. Providing separate and exclusive territories protects their consumer base and the annuity revenue stream they generate from attracting loyal customers and holding them.

How do franchisors determine territories?

Typically, franchisors determine territories that are based on zip codes, geographic size, population size, natural boundaries, or other criteria.

What is franchisee opportunity?

The franchisee has the opportunity to develop the brand in an exclusive territory and set it up for success in that region . There are also exclusive territories for your franchise system that protect your brand in each region.

Why is exclusivity important for franchises?

That’s because having a protected, generous, and clearly defined territory will ensure you don’t have to compete for customers with fellow franchisors; your staff will remain loyal; you are going to control your brand’s reputation and perception in your area; you are going to have an easier time getting franchise funding. In this article, we will focus on franchise territory location and how to choose the perfect franchise location.