Franchise Territories for Mobile Businesses; Why Limitations

In franchising an individual desirous of their own business will sign on with a franchising company and use their brand name, know how and expertise to make a living. The franchisor will generally assign an exclusive territory with limitations. In our franchise company we have mobile service units, which clean cars and we have to have territories to prevent in-fighting from franchisees which might inadvertently end up competing with one another.

Let us first talk about boundaries. Let us talk about why we have territories in the first place? Historically we have had in our mobile car wash industry one-man operations that may work in multiple cities. A young man or a young woman might go out and buy a pick up truck or van and put a plastic water tank or a couple of fifty-five gallon drums in the back of their vehicle. Along with a small pressure washer they would be instantly in business. Now, what they would do is go to certain office buildings and try to get customers. They would get a few of their friends to sign up. Some would say; "Come on back". They would keep coming back to these locations every so often and wash cars, usually once per week or twice per month. Then they would get a little bit into auto detailing as they learned the techniques, then they would mostly start to work on the higher end services because of course that pays a bigger dollar per car.

So they would do a little washing, some detailing and they would drive from one city to another. Then they would decide that, well they could get more money working over here in this richer area even though they lived in a poor area. When actually they could have made more money in a poor area doing fleet washing. But this is what a large percentage of our competition is doing now.

They will drive from city to city to city, spending time driving around in search of the big kill, the highest ticket easy money detail, often a Law firm with attorneys with more money than brains. They might spend each weekday in a different city. Never really developing a real strong clientele or strong customer loyalty. Never saturating the entire market place, but rather driving from place to place. They would be wasting a lot of time driving, sometimes during the middle of the day, and wasting money and gas and labor. Driving from place to place to wash cars in hopes of scoring the big detail.

Franchisors are looking to maximize each sector and not leave any grid un-tapped, thus setting up a grid defense plan to extend brand name makes sense. As a franchisee in such a franchise system your job is to make money and luckily the closer your customers are together the more market saturation you have the better the franchise brand name does in the area. Ah and the more money you will make too. WIN/WIN; think about it, think about franchising.

"Lance Winslow" - If you have innovative thoughts and unique perspectives, come think with Lance; www.WorldThinkTank.net/wttbbs

In The News:

Goldman Sachs Started 7300 Small Businesses. What's Next?  Harvard Business School Working Knowledge
Small Business Hiring Slows  The Wall Street Journal

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