A Simple guide to buying a franchise by James London

Author:James London
Language: eng
Format: epub
Tags: franchise, franchising, buying a franchise, buying a business, be your own boss, getting started in business, investing in a business, AUK, finance, business, management, boss, buy, buying, running, run, own, ownership
ISBN: 9781781662342
Publisher: Andrews UK Limited 2012
Published: 2012-05-04T00:00:00+00:00

It will become a good discipline to apply these basic thought processes to all industry sectors and areas of running your business.

Territory

When it comes to territory, the things you need to consider are;

How protected is it?

How many franchisees have traded in or on part of it within the past three to five years, this is a very sensitive subject for franchisors as they know people can be put off by knowing that one or two people before them have failed on a particular territory.

You need to be equally aware of a territory having already had a highly successful franchisee on the ground who has milked the area dry, an example of this would be satellite aerial franchisees where there was a heavy upfront demand as people signed up for the various networks, but now all that’s left is a mere trickle that is serviced by a host of other franchised and non-franchised service providers.

If the geographical area is empty around you, is or has anyone other than you, been looking to buy any of the proposed neighbouring territory?

Once you have agreed your exclusive franchised territory can you trade in areas not sod to other franchisees and if you can trade in those undefined areas can you look to contractually keep any major customers that you may develop in the non-exclusive area? It is worth a try but in reality most franchisors will be reluctant to do this because as you build up customer demand for the product or service in a non-exclusive territory you give the franchisor the opportunity to sell that territory as being “with proven customer demand” and a “great underdeveloped territory”. When you sign for an exclusive territory build that territory as a priority and only allow yourself to creep outside of that area for incremental business opportunities not as part of your core revenue model

Another key question is “How up to date is their territory software in relation to demographics?” etc. Most systems that I have encountered have been in the region of 3-4 years out of date.

If you are looking at one of the many mobile franchises you really need to be aware of how the territory you are looking to buy over lays with any advertising directories that you may be looking to advertise in.

It may be that your local Yellow pages, Thomson, and other directories may only cover a part of your proposed territory which may mean that for you to get full directory coverage for your area you may incur additional advertising costs to obtain full coverage for your area.

In some circumstances this may mean that you are advertising up against a competing franchisee in another neighbouring directory. Remember once you sign for your territory there is usually no changing it later when issues like this come to light.

“When in business you always need to be aware of how one thing impacts another”

Franchisors will always say “there is no such thing as a bad territory”, if this was truly the case why

Download

Copyright Disclaimer:
This site does not store any files on its server. We only index and link to content provided by other sites. Please contact the content providers to delete copyright contents if any and email us, we'll remove relevant links or contents immediately.