We must have already been familiar with the most common route by all the franchises to franchise their business, i.e. single-unit franchising. As we all know it is a contract based on a single location. In this case, a franchise can use the trademark of the franchiser. They can use the business system of the franchiser but both must be done only in the specified location in the contract. There is another option of opening a second or third or even more franchise too. But this must have a separate-unit franchise agreement that needs to be drawn individually.
Coming back to the territorial franchising, it is completely different from the single unit-unit franchising. As we clearly get an idea from the name itself, a territorial franchise is for a particular territory and not just for a single location. Master Franchising is a common term used for territorial franchising internationally and more commonly in the Philippines. In this contract, the franchiser will provide a specific territory to the franchise. So the franchisee can use the trademark and business system in that particular territory. A territory might include a city or even a group of island.
The complete process of the territorial franchise generally takes more time than the unit franchise. In such cases, the capability of managing multiple branches by the applicant of the territorial franchise is considered by the franchisor. They also consider the competence of the prospective territorial franchisee to create a middle management team which will be capable of running the complete branches of the franchise within the territory.
Within the territorial franchise, the franchiser needs to put up extra control and monitoring systems for the franchised business. It will take several hours to reach these territories by the franchisor. Moreover all the branches will not be in the daily route of the service officers of the franchiser. Hence to monitor the branch operations setting up a state of the art communications technology is mandatory.
In one case, a franchiser installed remote cameras to check on how the customer service is provided. It was also used to monitor how well it is manned daily and the branch is maintained. In some other case, the franchiser needed to have all the branches in a particular franchise territory cumulated to its headquarters by the point of sale system (POS). Monitoring the product movement constantly and providing a regular inventory forecasting guidance to all the branches is the reason for enabling it.
The field visits to all the branches of a territorial franchise by the franchise cannot be frequently possible as distance plays an important factor. The frequency is much lower compared to the single-unit franchise. Additional training must be given to the territorial franchisee on providing operational assistance to various branches effectively. For further details contact the Best Franchise Consultant.