Should a franchise that operates out of a “bricks and mortar” store give territories or not? That is one of the biggest questions in Franchising today.
There are many opinions, and companies do it differently depending on their size, brand awareness, level of investment required by the Franchisee and basically, the view of the CEO or his franchise advisors.
The Franchisor’s views are normally around the line of let’s keep it to a minimum as it gives us more flexibility for the future. The Franchisees view is normally around thinking of it as an exclusion zone and therefore a guarantee that the Franchisor (or his successor) cannot introduce another store into the area.
Published in the Business Franchisor 2011
Anyone who watched John Cleese in Faulty Towers will remember his great lines about ‘Don’t bring up the war!’ The same can be said for territories, preferred marketing areas, exclusion zones, or whatever name you chose to give them. If you are a franchisor, may I suggest you think very carefully about what you agree to right from the start. As, like many things, promises once given are VERY hard to get back!
What's in a name?
The first point I suggest you think about is, “What am I giving a franchisee in terms of a spatial footprint and what should it be called?”
The four most common things that a franchisor gives to a franchisee are:
Peter Buckingham is the Managing Director of Spectrum Analysis Australia. He is a certified Management Consultant, and a Fellow of the FCA and IMC.