Tom’s Franchise Information Blog

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As a franchisor I am often asked advice on setting up new franchise systems. A recent question came in that was of interest to the Franchising Community; Is it wiser to use radius mileage rings or zip codes to determine exclusive territories when granting new franchises?

Well, let’s discuss this for a moment. One problem we found when using a Mileage Territory system is that there would be over-laps and dead zones. For instance a beehive, takes up all the space, but if you stack pipes on a pallet, you have dead space between. This was a huge issue and often caused us to sell territories that looked like a city + 1/3 of another town + 1/5 of another town + 1/2 an industrial park and 2/3 of a spread out college campus.

Zip Codes are okay, but they are problematic too. Sometimes city limits are the best, why? Because when a franchisee advertises in a newspaper specifically for one city or in the yellow pages, they can merely name the cities. It makes it easier for consumers. Now realize we run “mobile service franchises” which is different than a retail fixed-location, which might be better with zip codes or major street, river, or city boundaries. Sometimes it just makes sense to make the territories unique to the actual area and its defined areas based on what consumers feel are boundaries.

Some people say this takes more time, but I say that it’s the best in the long run and it causes fewer issues between franchisees when it comes to spaces in between, because the franchisor, we really do not have time for that, nor should we get involved. I hope this helps you with valuable information and insight into the World of Franchising.

“Lance Winslow” - Online Blog Content Service. If you have innovative thoughts and unique perspectives, come think with Lance; http://www.WorldThinkTank.net/.

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