A franchisee wants to feel protected, that their territory and market are safe, and provide the expected returns. The only way to put safeties in place regarding a franchisee’s territorial rights is before they sign the Franchise Agreement. Franchisors may offer either exclusive or non-exclusive territory rights, and franchisees need to know this before making any commitment. Franchise territory mapping can with making the decision.
Franchise agreements need to spell out individual territory rights and cover all possible situations of ‘what if”. Several conditions may occur that theoretically don’t disrupt the contract’s territory section, but which can severely levy on one’s sales and profits. Since potential franchisees should always talk to those, who are already operating the business, provide prospects with a list of current franchisees so they can get their thoughts about territory shares, and the franchisor’s guarantee regarding their distinctive rights.
Many of the franchise companies learn, either from their experience of others or through their own mistakes in developing franchise territories. When buying or selling a franchise, the dominant practice is to outline a region for each franchisee.
A recent study has shown that more than 90% of active franchises use the concept of territory. Both franchisors and franchisees should examine the various procedures for allocating franchise territories and then select one that benefits and satisfies both parties. This franchise agreement is the primary and official document for documenting details in writing related to territory rights and conditions.
What is the role of Geometrx?
GeoMetrx online mapping is the software that lets us take business data from various sources and convert it into useful and game-changing conceptions. This software plans any location that can be found in Google maps.
Benefits of using Geometrx franchise territory mapping
One of the significant advantages of using Geometrx mapping is the franchise organizations of all sizes can now have access to demographic mapping and reporting. One can select the best location and improve successful and unique franchise territories for the franchisees. Zip codes alone will not be the best choice for creating franchise territories.
What is the Franchise Territory First Right of Refusal?
Once a Franchisor identifies a new territory, a nearby franchisee may have an option to purchase it before it is made available to the public. If the franchisee chooses not to take the new franchise territory, the franchisor is then permitted to grant the franchise to a third party potential franchisee. Rights of first refusal are beneficial to franchisees because they help franchisees protect the areas contiguous to their current franchise territory.