Kaufman & Forman, P.C.
Call to arrange a consultation
678-957-7769 | 770-390-9200
Contact Us
practice areas

The necessity of defining a franchise territory

Expanding your successful business into a franchise is a common way to grow a great idea. While franchising can be a financial windfall to both the franchisor and the franchisee under the right circumstances, many franchisors fail to properly define the territory they will serve. Too large or too small a territory, or crowding a given market with too many franchise locations to be supported, can be lethal to a franchise that may otherwise flourish.

One of the most common mistakes that new franchisors make is taking on too large of a territory when they initially expand from a single location. A territory that covers too large a service area will be difficult to serve properly, and often leave your franchisees exhausted trying to reach a far larger market than is wise, or often even necessary. Contrastingly, an overly cautious franchisor may establish too small a territory that misses out on a valuable market that is just outside of its scope. Committing to the due diligence required to properly establish the ideal territory location and size for you franchise offering is almost always worth the additional up-front costs and prep time.

Another common pitfall for franchisors is over-saturating a valuable market with too many franchises for any of the individual franchise locations to be optimally successful. In some circumstances, having fewer well-resourced franchise locations in a given market can be more profitable for the franchisor in the long run. Franchisees who feel supported and not pitted against each other in a scenario that is only designed to benefit the franchisor will be more motivated to make the most of their opportunities.

Franchising is a great opportunity for many businesses, but it can be a difficult path to walk for an unexperienced business owner. The assistance of qualified, experienced legal counsel can protect the business’s interests and help guide the business to achieving its goals.

No Comments

Leave a comment
Comment Information

Contact Kaufman & Forman, P.C. Now

Bold labels are required.

Contact Information
disclaimer.

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.

close

Privacy Policy

get Legal Help Now

Kaufman & Forman, P.C.
8215 Roswell Road, Building 800
Atlanta, GA 30350

Toll Free: 800-461-5864
Phone: 678-957-7769
Fax: 770-395-6720
Atlanta Law Office Map

Review Us

Robert Kaufman has been selected as a 2013 Top Rated Lawyer in ‘Commercial Litigation’ as will be published in the May issue of The American Lawyer & Corporate Counsel magazine.Alex Kaufman has been selected as a 2013 Top Rated Lawyer in ‘Commercial Litigation’ as will be published in the December issue of The American Lawyer & Corporate Counsel magazine.

*AV Preeminent and BV Distinguished are certification marks of Reed Elsevier Properties Inc., used in accordance with the Martindale-Hubbell certification procedures, standards and policies. Martindale-Hubbell is the facilitator of a peer review rating process. Ratings reflect the confidential opinions of members of the bar and the judiciary. Martindale-Hubbell ratings fall into two categories: legal ability and general ethical standards.