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.
The Kardashians: Marketing Lessons for Every Business Owner
Kardashian matriarch Kris Jenner has been criticized for “pimping out” her children, but the mother’s shrewd dealings may be a smart move. Of the 10% manager fee Kris takes from her family members’ earnings, daughter Kourtney says, “We’d have to give it to someone else; I’d rather keep it in the family,” and Kim states, “She has this vision for us, and she makes it happen.” In fact, it has been reported that Kris “makes it happen” to the tune of $65 million a year. What can business owners learn from this? When the goal is to build wealth, keep it in the family – all of it.
Franchise Disclosure Document for Dummies – Part 6
The key disclosure in Item 15 states whether the franchise owner is obligated to participate in the direct operations of the franchised business. For prospective franchisees looking for a pure investment rather than a business opportunity, this disclosure might be the first (and only) provision they read in the FDD. Although, an experienced franchise investor may be able to negotiate an exception with the franchisor.
Minority, Women Entrepreneurs Find More Opportunity in Franchise World
While there are many risks and hurdles involved in starting a new business, there are also many rewards. If you’re ready to start it up, but aren’t in the position (financially or otherwise) to risk it all in starting something new, you may consider franchising. Franchising offers many benefits to aspiring entrepreneurs, especially to minorities and women, who are seeing more opportunities in the franchise world in recent years.