The question is, does an exclusive territory provision mean that only the licensor is prohibited from selling. Many franchisors no longer award exclusive territories preferring to restrict the grant of the franchise to the exclusivity of the location itself or to the mall in which the premises are located. This type of exclusivity is more common with established franchisors. Emerging franchisors may be more flexible on this issue. Franchisees often misunderstand the rationale that applies to the size of a territory and consequently insist on a. See full list on franchise101.
An exclusive territory can be defined by a number of methods including a certain radius from the location , postal walks , postal codes , municipal limits and natural boundaries such as rivers. As previously mentione it may be restricted to a mall or the location itself. Some methods work better in certain situations than others. For instance, a radius would not be effective in a situation where there are two distinct trading areas separated by a river. It may be practical, and indeed benefici.
Most franchisors consider that it is essential to keep up-to-date on market changes and consumer expectations by maintaining its own stores. Company-owned stores can be used to train new franchisees, provide a base of information that the franchisor can use to guide its franchisees, and test new concepts or products before offering them to franchisees. (more…)