4 Reasons Why Franchise Territory Exclusivity Is Important

territory exclusivity gives franchisees peace of mindAny franchisor can accept a franchise fee. But when investing in a franchise, you shouldn’t accept anything less than a great return on your investment. Along with the rights to use the franchise name, you should also seek out a franchise group that offers a strong business model, an experienced franchise management team and a track record of franchise operator success.

Lastly, one of the most important — and valuable — things to look for when selecting a franchise is territorial exclusivity.

What Does Franchise Territory Exclusivity Mean?

Territorial exclusivity grants a franchisee sole rights to market and operate the franchise brand in a specific area without the threat of competition from another franchise operator. Territories can be defined by zip code, city and state boundaries, physical distance from a pre-existing franchise or by the number of potential customers within a given area.

Let’s look at how franchise territory exclusivity can benefit you as a new franchise operator.

You Won’t Have Anyone Cannibalizing Your Business

Think about your favorite coffee chain. Whether it is Tim Hortons, Dunkin Donuts or Starbucks, chances are, if you live near a big city (or even some not-so-big cities) there is more than one location of that franchise in your neighborhood. Each store offers the very same menu items at the very same prices, and you probably have more loyalty to the franchise name than to a specific location or franchise operator.

This dynamic pits franchisee against franchisee, costing everyone customers and dollars. If you don’t have territorial exclusivity, you can find yourself caught in the middle.

Your Staff Won’t Become Your Competition

Hiring great employees is essential to any business. But after they are hired, you’ll also have to put a lot of time, effort and energy into educating them about the franchise, training them to ensure their success, and motivating them day in and day out.

Without territorial exclusivity, ambitious employees can take everything that you’ve taught them and open their own franchise location, leaving you with the dual challenge of filling the role and fighting off a new, well-trained competitor that knows all of your tricks of the trade. A well-defined franchise territory ensures that, even if an employee wants to start a franchise of their own, he or she will have to do so far away from you and your operations.

You Will Set The Tone For Your Franchise

When opening a franchise for the first time, you won’t just be building a business; you’ll be building a reputation. You will be the one responsible for creating a great culture, interacting with customers and positioning your brand as the go-to option in your industry.

However, if there are other franchisees in your area, your reputation will also be tied to their behavior. If they let their customers down, your stature goes down with it.

having no franchise territory exclusivity pits franchisee against franchisee, costing everyone customers and dollarsYou Will Have Greater Access To Funding

Securing franchise funding from a lender is essential to a new franchise operator. However, when deciding whether or not to loan money, banks will look closely at your competition. If they decide that another franchise operator is too close for comfort, they will be reluctant to extend credit to you.

Our Territories Are Built For Success

At Bin There Dump That, we understand the importance of territorial exclusivity. That’s why we offer generously sized, well-defined and protected territories that contain ample customers. We also offer two territory models — a City Builder 3 Pack for high net worth individuals looking to ramp up quickly and a Single Territory option for people who are new to franchising and who may not have as much money to invest — for added flexibility.

Learn more about our franchise territory policies and then follow our six-step process to begin securing your very own territory today!

Images: Starbucks, Aerial view

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