When purchasing a franchise, it is important to understand how the territory has been defined. The reasoning behind a franchise territory is to provide the franchisee with a reasonable level of comfort that the business being purchased can be economically successful.
When the franchisor maps out the franchise territory, they will ensure the territory is large enough and that it contains a sufficient client base to operate profitably without facing unnecessary competition from other franchises.
What type of franchise is it?
First of all, verify what type of franchise it is. There are generally two main types of franchise territories – “exclusive” and “non-exclusive”. These will be detailed in your franchise agreement.
Exclusive territories
A franchise with an exclusive territory means that the franchisor will not introduce another franchise in your area. The exclusivity of the territory is intended to give you comfort that you can build your business without the worry of another franchisee moving in on your area during the term of the franchise agreement. However, this of course does not stop competitors operating in the same area.
Non-exclusive territories
Non-exclusive territories are similar to exclusive territories in that the area in which you can operate is defined. Although unlike exclusive territories, non-exclusive territories allow franchisors to sell other franchises within that territory.
What opportunities are there?
Next, you should research what opportunities there are in the franchise territory you are interested in. Take the time to research the demographics of the territory to determine the size of the target market. For example, if you are looking at starting an elderly healthcare franchise, then it would be useful to know how many how many people aged over 65 years live in the territory?
Having a knowledge of the size of your target market is very important for building your business, as well as gauging the franchise opportunity on offer. If you know the size of the market, then you will be more confident planning the potential growth of your business.
In the healthcare franchise market specifically, there are many opportunities for your business to grow. As the ageing population increases, it is likely that there will be an increase in demand for elderly care. This increase in demand has given Kare Plus the opportunity to offer franchises in many new parts of the country with lots of territories available across England and Wales. To find out more about the franchise opportunities Kare Plus has to offer, please visit our locations page.
Ask questions
As every franchise is different, it is important to know exactly what you are buying into. When you’re researching a franchise business for sale, it’s highly recommended that you speak to existing franchisees that already work for the company you’re interested in. As part of the questions that you ask the franchisees, make sure that you obtain their thoughts on whether they feel that the territory structure is fair and reasonable.
Before buying a Kare Plus franchise, you will be invited to attend an interview. This is a great opportunity to ask any questions you may have and meet the people who will be helping get your business up and running.
If you would like to find out more about the process of buying a Kare Plus franchise, get in touch with our franchising team on 01952 783 338 or email franchising@kareplus.co.uk
