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Advisory 2011-09-01

Seal your franchise territory before it’s too late

Territory plays a significant role in making a business successful for the franchisee. Any issue arising out of territorial disputes between the franchisors and the franchisees is a cause of concern. Resolving these issues at the initial stage is the best

By Abha Garyali Sub Editor

Ideally whenever an entrepreneur is signed as a franchisee by the franchisor, he is assigned a particular territory where he opens and operates the franchised outlet. He enjoys complete exclusivity in the territory with no other outlet or franchisee of the same brand in its close proximity. It is generally understood by the new franchisees whether it is included in the franchise agreement or not. The problem arises when franchisor signs up another franchisee in the same territory and gives him the right to open and operate as a franchisee of the same brand.  In such a situation the old franchisee may feel cheated and develops strained relations with the franchisor. Franchisor might have done it intentionally or unintentionally, but it is the franchisee that is at loss. It not just affects the sales and increases competition but also dampens the footfall and the reputation of the old franchisee. Also it is the biggest cause of concern as it develops mistrust among the franchisees towards the franchisor.

What are Territorial rights?

In case of franchising, territorial rights refer to the extension till where another franchisee can open his outlet of the same brand. Every franchisor takes up franchising with an aim to deeply penetrate the market for maximum sales and profits. This can be done adequately if franchisees are offered sufficient territory to establish their foothold and make high profits with limited competition from the same brand. But in certain cases it is seen that a franchisor in a hurry to expand his business and earn more may allow another franchise outlet in his previous franchisee’s   territory.  This is where a franchisee needs to be careful and exert his rights.  Therefore it is imperative for any aspiring franchisee to set his territorial limits with the franchisor before getting into the process and opening his outlet. A franchisee must know that there are two kinds of territorial rights. These are:

Exclusive territory: As its name suggests it offers exclusive rights to a franchisee to open his outlet in a certain given location. This gives the advantage of a guaranteed client base with no threat of competition. However it has its negative side also. In this franchisee’s are allowed to market their outlet in the given territory. The franchisor might define the exclusive territory as a very small area, which will further be a greater problem when the franchisee will not be able to advertise out of the defined boundaries.

Non-exclusive territory: In this the franchisee will not get any rights for an exclusive outlet. An outlet can be opened and operated in other franchise territories, with no guarantee that another franchised outlet cannot be opened in the same location. Other franchisees can also open their outlet near to the previous one. Increased competition is a situation can lead to a drop in your share of profits. However non-exclusive territory offers a lot of marketing and advertising freedom to access a larger client base.

Safeguards for the franchisees

An aspiring franchisee needs to safeguard him in case of territory infringement at the time of signing the franchise agreement. A franchisee needs to address the following clauses in the franchise agreement. These can put the franchisee in a better place in case of any infringement or dispute with franchisor. Few clauses are given below:

  • Kind of territory: Franchisees need to ensure whether they are getting into exclusive or non-exclusive territory. They should be adequately aware about the benefits and disadvantages of both of these before signing the agreement.
  • Right of first refusal: As a franchisee, you should have the ‘right of first refusal’ clause according to which the existing franchisee (that is you) would get the foremost option to take over the new territory before it is offered to anyone else.
  • Course of action in case of infringement: Franchisees while signing the agreement should keep in mind to add a clause about the actions that can be taken in case of infringement in their franchise territory. This will make the franchisor more careful not to break their word of opening another outlet near the previous one.
  • Re-negotiation regarding franchise territory: The possibility of future re-negotiation regarding the territory should also be added as one of the clauses. Franchisees need to keep open their doors if they want to change exclusive territory rights to non-exclusive or vice-versa.
  • History of franchisor: Franchisees must view and analyse the history of franchisor in case of any disputes in the past. Moreover they should find out how he had handled all the allegations and disputes.

Keep your eyes wide open

It is a must for aspiring entrepreneurs not to trust franchisors without getting each detail about the agreement in writing. It is a complete ‘NO’ to believe the words of any franchisor, however good his reputation is, without it being written and signed. All rights that have been promised by the franchisor should not be left to the goodwill of his word by mouth. Moreover getting a franchise attorney into the picture to read and analyse the agreement should be considered important.

Follow the saying ‘Prevention is better than cure’ before finalising on any franchise. It is better to take adequate precautions before jumping on the road to become a successful franchisee.

Comment
rahul malik 04, Apr 2011 at 02:07 AM
I am interested and i have done MBA in retail from govt institute.I am a resident of distt. Muzaffarnagar of UP and about my family background my dad is deputy supdtt. of police.do let me know the procedure.
vikas mane 04, Apr 2011 at 02:39 PM
we are intersted in about concept so we have details of franhies so pls send details we wait your mails replay? thanks.
osho 04, Apr 2011 at 03:52 PM
plz send me some detail for Drishtee and its prospects i want to start a small system in haryana.
Mahendra Narayan Singh 04, Apr 2011 at 04:20 PM
We are interested in your proposal.Kindly provide detail information regarding your franchise
SUKHDEV SINGH 04, Apr 2011 at 06:10 PM
i am interested in ur franchise , pl probide me details
ANIL KUMAR 04, Apr 2011 at 06:28 PM
I want to be the part of Drishtee i am from Samba (j& K) plese let me know how can i become .
Toushif 04, Apr 2011 at 06:43 PM
can you give more detail this franchise.i think this is good
pradeep kumar tyagi 04, Apr 2011 at 08:58 PM
hi sir/madam, i wanna to know full information for franchise and contact details
francis huten 04, Apr 2011 at 09:39 PM
i m very interested in being a franchisee of Drishtee.Let me know if your organisation is expanding to the state of manipur.
Nilesh Jogal 04, Apr 2011 at 09:46 PM
Kindly let me know the earning potential and details of your activities in Gujarat.
dev 04, Apr 2011 at 10:13 PM
Its really a great motivational data base .
Gautam cahudhury 05, Apr 2011 at 12:40 AM
I am intersted to take franchise for Orissa/Cutatck Districk.
Rajendrasinh Chauhan 05, Apr 2011 at 02:26 AM
i am interested in your project contact me as soon as possible.
shailendra singh 05, Apr 2011 at 03:08 AM
pl send me details of opportunity.
Arun dureja 05, Apr 2011 at 05:40 PM
i want to know more about Drishtee Development and Communication Ltd (DDCL).
himanshu bali 06, Apr 2011 at 12:49 AM
Hello.How i can associate myself with Drishtee in a usable manner for social enterprise.I did my bcomm(pass) from delhi university.I am waiting for your reply.
Mohammed Neamatullah Syed 06, Apr 2011 at 05:40 AM
I m interested in to do this pl advise me how to proceed
Gaurav Kaushik 06, Apr 2011 at 08:44 PM
hi sir/madam, i wanna to know full information for franchise and contact details. I have done my b.tech(I.T) and working for Nextenders india pvt. ltd. who is responsible
mohd amin dar 06, Apr 2011 at 11:05 PM
i found it very interesting please mail me more details.how can i get franchise.
Ajay Atri 07, Apr 2011 at 01:10 AM
Dear Sir, I belong to a rural area of ncr. I want to know more detail about Drishti. How can I start this business.
Ravi Chander 07, Apr 2011 at 09:33 PM
I would like to know the details. Best Regards Ravi
ahmad 08, Apr 2011 at 12:17 AM
hello sir, this is Ahmad. I'm interested in DDCL franchise, plz let me know the procedure. thanks..
ved prakash 09, Apr 2011 at 11:02 PM
its interesting one m 4m bihar begusarai district m interested in ur frenchise pl tell the procedure to occupy ur frenchise
ASHOK KR. JOSHI 10, Apr 2011 at 01:14 AM
yes I'm interested to know more about Drishti and its modus operandi.Pls provide me the details
Hari Thapa 10, Apr 2011 at 04:37 PM
I am still unknown about DRISHTEE please enlighten me.I am from rural area .Say something about its franchisee also.
piyush 10, Apr 2011 at 07:58 PM
i m very interested in being a franchisee of Drishtee.Let me know if your organisation is expanding to the district gorakhpur of uttar pradesh.
Sunil Shukla 11, Apr 2011 at 05:57 AM
i m interested in being a franchisee of Drishtee.I am from Allahabad, Uttar Pradesh.
Rajesh Siyag 11, Apr 2011 at 07:06 AM
I am interested in your proposal.Kindly provide detail information regarding your franchise.
Rahul Priyadarshi 11, Apr 2011 at 04:06 PM
plz send me some detail for Drishtee and its prospects i want to start a small system in Arrah (Bihar)
Akhilesh Kumar Dubey 11, Apr 2011 at 04:13 PM
i m from auriya dist. in UP i am MBA & graduate in 1995 presently living in residantial premises is around 2 acre. I very interested in being a franchisee of Drishtee. My Agriland and residance house in two diffrent gram panchyat. I want complete proceser of business and the processor for the franchiese.
ARUL 11, Apr 2011 at 04:31 PM
i m very interested in being a franchisee of Drishtee.Let me know if your organisation is expanding to the district krishnagiri of TAMILNADU
Puja Kumari 11, Apr 2011 at 05:41 PM
I am very interested to became a franchise of Drithtee. Please send me all details.
pramod 11, Apr 2011 at 07:45 PM
HI I am interested ... please get in touch with me with full details
PRATAP VERMA 11, Apr 2011 at 09:15 PM
Sir my name is PRTAP VERMA .I have done my MBA IN 2010 .I am looking my own business . and i am also belongs from village area . I am intrested with your proposal .Please send me detaild information of DRISHTEE . Thank You
jagjit 12, Apr 2011 at 01:33 AM
I want to be the part of Drishtee Let me know if your organisation is expanding to the state of punjab. Pl send me details of opportunity. thanx
naren 12, Apr 2011 at 01:35 AM
we are also in the same concern. Let send me the complete details to discuss further. and please don't forget to reply me..
Ram Gopal Singh 12, Apr 2011 at 02:52 AM
let me know ,how can start this franchise.
g.veerraju 12, Apr 2011 at 03:04 AM
Kindly let me know the earning potential and details of your activities in andhrapradesh.
nadeem 12, Apr 2011 at 05:33 PM
i am interested in your concepts and want to know how it will elevate life of rural enterpreaneur like me and my state jharkhand. so please send complete information of your system.
nagendra singh 12, Apr 2011 at 06:29 PM
I am interested in Ur project& to take franchise in my village/townin mainpuri(U.P)
khem singh 12, Apr 2011 at 07:17 PM
plz give some more details, i am quite intrested in this work, i belong to village sarmathla distt-gurgaon haryana.
raju 12, Apr 2011 at 10:30 PM
i have gone through the details and intrested in this opportunity. please send me further information in this connection at the earliest. thanks
KAILASH LAHOTI 13, Apr 2011 at 08:22 AM
I am interested in being a frenchisee of Drishtee. Let me know if your organisation west bengal
santosh kumar 13, Apr 2011 at 07:13 PM
we liked it most, its most apresiative sincere efforts to do some good for societal development. we want to be associated with your programme some extent in our own specific fields ofoperation of resources coordination and protetion suport platform provider group. pl keep us informed more hope for best mou to be signed.
javed akhter 13, Apr 2011 at 08:59 PM
i m very interested in being a franchisee of Drishtee.Let me know if your organisation is expanding to the district Sitamarrhi Bihar
PRATAP VERMA 14, Apr 2011 at 05:49 AM
i want to know more about Drishtee Development and Communication Ltd (DDCL).
RAJESH RATHI 14, May 2011 at 01:40 AM
i have gone through the details and intrested in this opportunity. please send me further information in this connection at the earliest. thanks
Gautam Chaudhury 15, May 2011 at 11:43 PM
I am intersted to such bussiness activity in Banki, cuttack,orissa immediately. Gautam Chaudhury
Amit kumar 02, Jul 2011 at 06:18 PM
I m amit from sonipat haryana.i m intrested in ur project.plz send me some detail.thanx
Mirza Asim baig 25, Aug 2011 at 09:18 AM
Dear Sir I am working as a territory manager in pharma marketing in indore belongs to Ashta Village distric sehore near bhopal want to start your project in ashta tehsil kindly inform me for the same i am very much inetrested.
David 30, Jan 2012 at 02:13 PM
kindly send me the details abt it
swapan patra 07, Feb 2012 at 05:42 PM
Dear sir\r\n I from west bengal and interest to get franchise. please guide how to process \r\n
roshan goswami 17, May 2012 at 08:04 PM
hallo sir... this is roshan goswami from (nagpur,maharashtra).i am very intrested about ur concept.can u give me all details about ur project. i am waiting ur important response for me....thanking you\r\n\r\n
shailendra Singh 02, Aug 2012 at 01:08 PM
Please give more detail this franchise.
shailendra Singh 04, Aug 2012 at 08:56 AM
Kindly give your ideas & details of Drishtee.
kaushik 07, Feb 2013 at 08:56 AM
please tell me about drishtee concept detail and how i get it\'s franchaise\n
deepak lakhmani 27, Jun 2013 at 02:18 PM
I am very interested to became a franchise of Drithtee. Please send me all details.
raghubir 10, Dec 2013 at 05:58 AM
I am raghubir singh a professional in a field of marketing & business development have rich experience of 9 years in this particulars field Looking a opportunity as a form of franchise for indian rural area (bihar states )
Yunus Mulla 25, Dec 2013 at 01:05 PM
This is to inform you that I am very interested to became a franchise of Drishtee. Please send me all details.
Ajay Kumar 23, Jan 2014 at 08:01 AM
Please send me more information about Drishti
Prashant Shetty 01, Feb 2014 at 06:15 AM
I.am interested in your proposal.Kindly provide detail information regarding your franchise. I Belong to Karnataka.
Prashant Shetty 01, Feb 2014 at 06:16 AM
am interested in your proposal.Kindly provide detail information regarding your franchise.
vilas zunjur 25, Feb 2014 at 01:09 PM
I had 14 + experience in banking and finance and interested to start own business in finance and interested in franchise. Pl. contact me.
narendra navprabhat 12, Mar 2014 at 07:55 AM
dear sir/mam, we are looking for a franchise.
Palash Moule 19, Mar 2014 at 07:56 AM
I am interested in your project, kindly provide details.
NARENDER SHARMA 21, Mar 2014 at 07:25 AM
I M INTERESTED AND I WILL TRY TO DO MY LEVEL BEST. PLEASE GIVE ONE CHANCE
sumit kumar 22, Mar 2014 at 04:48 AM
hi i am interest in your project pls provide me details...i belong from bihar thanks....
Dhiraj ray 05, Apr 2014 at 07:27 PM
Sir,I am looking for Distri Franchisee in North Salmara Sub-division of Bongaigaon District, in Assam. I would like to start up both Education and Communication sector of Dristi in above localition of Assam.
subrat panda 24, Apr 2014 at 11:40 AM
Sir,I am looking for Distri Franchisee in kalahandi of odisha both Education and Communication sector of Dristi in all block of kalahandi.
pradeep kumar nayak 09, May 2014 at 04:08 PM
Sir,i am interested. plz.provide project details with income generation.
MALAY KHANRA 15, May 2014 at 11:10 AM
Hi , I belong from west bengal & interested to doing business with you please provide me further details of drishtee
anima b. patnayak 12, Jun 2014 at 05:56 PM
i m interested about dristee and i m working as PRI member of Hapjan Anchalik Panchayat, Tinsukia, Assam. now i want to join dristee. plz inform me joining procedure about dristee.
Somashekar M. S 18, Jul 2014 at 12:39 PM
Hi... I am from Karnataka (Dharwad) we are interested in about concept so we have details of franchises
prabhanjan kumar 07, Aug 2014 at 08:52 AM
i wanted to take franchise jehanabad .state ,bihar .
manish kumar pandey 06, Sep 2014 at 06:39 PM
we are interested in your proposal.So pls kindly provide detail information regarding your frenchise.
N.K.Sharma 03, Nov 2014 at 06:29 AM
please provide us the details of Franchisee business specially for rural & small towns in India.Thanks
rudra ganesh 17, Nov 2014 at 02:36 PM
i would like to open a mee seva service ... please tell me how to proceed
malay 21, Nov 2014 at 07:17 PM
I NEED A DETAILS ABOUT BELOW MENTION FOUR BUSINESS MODULE PLAN AND APPROX ESTIMATED COSTCentre for Education and Entrepreneurship Programme (CEEP) FranchiseWomen Health FranchiseDrishtee Money and Business Facilitator Franchise Drishtee Rural Retail Point Franchise
amit aiswal 13, Dec 2014 at 01:23 PM
we are intersted in about concept so we have details of franhies so pls send details we wait your mails
manish kumar pandey 25, Dec 2014 at 02:52 AM
we are intersted in about concept so we have detailes of franchise. so pls send details we wait your mail and call.
Dhanwanter 26, Dec 2014 at 08:51 AM
Send me the process for Franchisee. I want to start.
manohar kumar 04, Jan 2015 at 02:05 PM
i am interested in about concept. you are process for bihar in dist. kaimur bhabua. i want to start your business argently. you are contact via email and my mobile no.
john 11, Mar 2015 at 05:13 PM
i am interested and i have MBA finance with 7 years experience, my resident in tamil nadu tuticorin district. so possible please contact to me
Naresh Kumar Sharma 22, Mar 2015 at 10:49 AM
We are having big experience in various rural areas and now interested Rural Business opportunities as well as social support to those who need for growth in their areas.. Pl. provide some details & advice for the same.Thanks
Manoj Sahu 09, May 2015 at 01:47 PM
Send me the process for Franchisee. I want to start. please hurry up
pradeep kumar nayak 25, Jun 2015 at 06:30 PM
i am interested. please provide detail project to me. Thanks
malay khanra 30, Jun 2015 at 04:18 PM
Hi, I am interested about your Drishtee Money and Business Facilitator Franchise concept please send me the further details on my mail id. Thanks & regards
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