Where Is The Best Location To Open Your Franchise?
One critical factor to consider when you are thinking about opening a franchise is whether your location is suited for a franchise and which franchise suits your area the best. One thing that makes this consideration slightly easier is the notion of franchise territories. Most, but not all, franchises in the US are set up so that they grant exclusive territorial franchise rights to their franchisees to help prevent the issue of geographic competition.
The technical specifications for how a territory is allocated can vary from franchise to franchise. Some define them by geographical boundaries like streets, counties, or states, but others will have them simply defined as a radius surrounding each location. Regardless of how the territories are setup the general role of territories are the same. You as the franchisee have exclusive rights to the brand within that area. In doing so the franchise is suggesting that the territory you are granted has enough potential customers to allow your business to thrive. While it ensures you a protected area during the growth stage of your franchise it can also create pain points in the future.
As a franchise expands and the majority of its original territories are accounted for a risk begins to emerge. They can either stop expanding, or they can instead expand into pre-existing territories. This is beneficial for the franchise as a whole because they can service more customers, but for the old franchisees it cuts into their potential customer base. This is a cause of frustration for some older franchisees who have seen their territories cut away.
By and large exclusive territory agreements are extremely beneficial for both franchisees and franchisors. However, just like the other major factors of the franchising agreement they are issues that need to be discussed and negotiated during the application and decision process. As a potential franchisee you should make sure you understand what your territory agreement means and any recourse you may have if your franchisor decides to expand a new franchise into your territory.
Prospective Franchisees - The Financial Questionnaire
The first qualification considered and investigated is often the prospect's financial situation, so as a franchise applicant you will need to be familiar with the financial jargon that a franchisor may employ in their questionnaire.
How Franchises like groOrganic are Teaching America to Garden
It’s exciting to be a part of a growing movement - what some are calling a fundamental revolution in our food. Most of us were never taught what composting was, and a lot of us don’t know if a potato is planted in May or July, or if peppers grow underground or above. These days, however, you don’t have to let your lack of knowledge stop you. Dive in! There are a lot of businesses, organizations, and people out there ready to help, plenty of tools available for you, and at the end of the day, there are few things as satisfying, or as healthy, as eating afresh sun-gold cherry tomato that you grew yourself from a tiny seed.
Franchise Mergers and Acquisitions
There are several reasons for franchises to consider acquiring another franchise. It could give them the opportunity to add new products without the risk or cost of developing these offerings internally. It could help the buyer add new markets, geographically or demographically speaking, with an already strong existing brand. Acquiring a franchise supplier or distributor could build efficiency through vertical integration. Acquisitions can also help a franchise develop sufficient scale to compete with a larger rival more effectively.