Why Franchisees Should Develop Their Territory and Customer Base to the Best of Their Abilities

Many franchisees do not wish to develop their territories to their full potential, after all to do so often costs more money in capital expenses, it also increases the marketing budget and causes the franchisee to hire more help and grow their business. But why wouldn't a franchised outlet wish to grow and make more money, service more customers and expand their business? Lots of reasons.

For instance, many franchisees realize that their franchise agreement and term of their franchise will be coming due, and they may not wish to expand, and increase costs unless they plan on renewing and during a recession, well they like many small businesses maybe having second thoughts on being in business at all. Yet, this is short-sided thinking and let me tell you why.

First, a franchised outlet may be transferred even if the franchisee is not planning on keeping the business long-term for themselves (as maybe they wish to retire), but to improve the resale value it pays to solidly fill up the territory rather than leaving potential holes for a competitor to get a foothold, after all if a competitor comes in right when the franchisee is trying to transfer the business to a new franchise business opportunity buyer, it could kill the deal and mean the asking price has to come way down.

Additionally, if each franchisee has filled out and developed their territory appropriately, the franchise system will be like a solid brick wall, serving the most number of customers and the strongest brand in the sector in that region. Franchising does best when every franchisee does their best to win for themselves and the whole. Think on this, as it is a bit philosophical.

Lance_Winslow

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