| |
| |
|
patsbusiness2.com
|
|
|
|
Sample; Territory Reduction Policy for a Franchise Company
I propose this thought on the subject of Franchisee territory reduction based on performance for a Mobile Business Model. Please read the sample policy below as it explains the reasoning and methodologies considered to extend brand without risking underdeveloped territory. We will use a Mobile Car Wash Franchise Business for this discussion. This sample is speaking from the Operation Manual of the franchisor to the franchised unit: If the volume of your business decreases to forty percent of your original volume, we may request that you decrease your territory. During the first four months after purchasing your franchise, your business is just really getting going and you can kind of see that your franchise is working. Any time after the four-month start up period, if your business drops to forty percent of that initially achieved volume, you are not servicing your area's client demand adequately. Let's say at the end of the four-month period you are doing ten thousand dollars a month gross revenues with your car wash truck. In later months if your volume drops to 40% of that or four thousand dollars a month, we, rather then terminate your franchise for non-compliance of our standards, which could be a leading reason for such a drop, would allow you to make your territory smaller. All without you losing your franchise. Let's say for instance you are getting older, you love the work, you kind of want to retire but you want to go out on your car wash truck a couple of days a week. We would understand that, not a problem. But in that case we would want to decrease your territory. We would ask you, if in fact you are only going to work three days a week and you are not going to service your area's total volume, can we decrease your territory by the factor of which you no longer want to work? For instance, if you are working six days a week or five days a week and you want to just work two days a week, that is a significant drop. That means you are not getting to sixty percent of your business. Well that sixty percent of your business needs to be serviced by someone. If you were not willing to do it, we would like to take your current exclusive territory, decrease it so that someone else could have part of your area to work in or you can sell that portion to the next nearest franchisee. This only makes sense. Now we are not going to decrease your territory without telling you or warning you or helping you if it wasn't your intention to decrease it in the first place. In other words, if you really do want to control the whole territory but you just do not want to work the truck yourself fulltime, we can train your managers for a set training fee. You can have them run the truck on the days you are not running it. You can also decrease your work load but still service your entire territory by using an independent contractor who might rent a car wash truck from you and work for you three days a week. He/she could continue to build the route and you could still keep your original customers that you love to do. We do have franchisees that think like this. They would still like to work but only on a limited basis. This is fine with us. But if you just want to do your business a little bit, then we would want to decrease your territory. Of course, we would compensate you for the decrease in area and reassign it to a new person. Or we could let you sell part of your territory to another person. We need to approve the sale or transfer. This would give part of your area to someone else and let him or her build upon that business. This arrangement would let you can keep any of the original customers that you got during the Blitz marketing mission that you wish to keep. Percent Market Penetration At the end of five years if you only have 1.2 percent market penetration and you are not really wanting to expand your business beyond that, we may ask you if you would not mind selling your business or decreasing your territory. Or would you consider taking on an investor who will buy a second car wash truck and be in a partnership with you to service the rest of the area's volume. Over a five-year period you should have achieved a three to five percent market penetration without too much problem. One point two percent is about the minimum that we would expect after five years. Each year consistently more and more people will know about your business. Since more people know about your business and want your services, you are going to have more potential customers. So, one point two percent market penetration over a five-year period would be kind of a dismal result. Although, if that is all you wanted out of your business, just to do it half way and work at your own pace, that would be acceptable to us. But we will advise you there are customers not getting serviced that probably want service. By this time you would already know that you are not getting to all of the customers that you want to get to. In which case you want to either add units with managers or hire independent contractors to run your truck on the days you do not want to work. We will be willing to help you with this but you have to understand that it is important to have complete market penetration. There is no reason to let would-be competition get a foothold in your area. You obviously will not be getting market penetration if you are not hitting all of the customers and if you don't service the customer "someone else will". Now, if you lose some of your customers because something happened to the customer base in your territory like corporate relocation or downsizing, or you had a bad worker or you got injured and now you are better, we will want to go back into your territory and fix whatever was messed up. This makes sense. Obviously we want to do this. So kind of expect that if you have a problem with your business, we are going to come in and fix it with you. There may be a point where you are not going to want it fixed but we are going to come in and fix it for you anyway. We want you to be successful and the cars and customers to be serviced properly and to an adequate degree. You may have your master franchise decide that you are not pulling your weight and they are going to come in there and help you. This usually happens after the fourth or fifth year. At which time we are going to have to ask you to either start servicing all your customers, or agree to sell part of your territory to someone else that wants to buy a franchise or to an existing franchisee that wants to add on to their territory or sell your entire operation and move on to something else. Take a profit by selling, shake hands and everyone wins. We really need to get to all of the cars and be a household name in your area. We want to be a household name in every city in the United States and later the world and your territory is not any different than anybody else's. All cities need to have complete market penetration over a five-year period. There should not be any competition remaining and if there is it is because you are not servicing your customers correctly. If you are not servicing your customers correctly we want to come in and help you fix that. If you were not willing to have us come in we would have to request that you take on a partner, buy an additional car wash truck or make your territory smaller. We can agree on something that is good for you and sell that territory to someone else with the proceeds going to you. These are all things to think about with your territory. If you are not going to work your territory then let someone else work it. Car Wash Guys must always dominate the industry. "Lance Winslow" - If you have innovative thoughts and unique perspectives, come think with Lance; www.WorldThinkTank.net/wttbbs
MORE RESOURCES:
Small-Business - Google News |
|
|
|
RELATED ARTICLES
Cash Flow: Why Chaos Equals Poor Cash Flow Recently one of my customers told me the chaos swirling through his company was the result of poor cash flow. If only he had more money, his company would run better. Pressure Washing; How to Bid Concrete Cleaning Jobs Remember the cleaning business is all about time ratio to money. You want to be making at least a $1 a minute when doing concrete work at a minimum and aim for $100 to $200 per hour if you can get it. Pet Grooming Business Do you like animals? Would you like to work for yourself? Pet grooming could be the career for you.A grooming business is more than just washing dogs. Comparing Boston Area for a mobile car wash business The Boston suburbs seem to be rich with possible locations to wash cars and a mobile car wash would be well served in that market. The customers have good jobs, high paying salaries and indeed demand such personal car washing services. Starting a Small Business? ?Tips from a Veteran Congratulations, you are starting a small business! You are taking charge and going for your piece of the American dream! Your excitement is high, and the adrenaline is pumping! Everyone dreams of freedom and owning a successful business, but not everyone can successfully create that reality. Now that you've made the commitment to give it a shot, let me give you the single most important tip that I can give you to insure your success. Business Scents - Do They Work? You see it often in large shopping complexes. Customers seem to be flocking to a certain stall in large droves. 11 Things Small Business Owners Can Learn From Tiger 1. There Are No "gimmes" - They count two-foot putts on the PGA Tour. Shopping For a Franchise Shopping for a franchise is easy if you know what you are doing. You can choose between radio adverts, newspaper adverts, personal recommendation, Internet, or visit a franchise exhibition. Slip And Fall Professionals; Service Businesses Since you own a business you probably have liability insurance to help you against a scam of slip and fallers. Some entrepreneurs call them slip and fall professionals. Are You a Small Business Casualty? When a person knows and knows not that he knows. Teach him. Online Search: Small Businesses Level The Playing Field Seventy percent of US households use the web when shopping locally, and about 25 percent of all searches are looking for local information. As more and more households make the switch to broadband connections, this trend will continue to escalate. Its Spring - Time For A Compensation Program Tune Up Now that winter has passed, the annual ritual of spring cleaning is in full swing. Spring cleaning is more than cleaning the windows and clearing the cobwebs that hid in the corners during the winter. Marketing - The Way To Make What Youre Really Worth You only have so much time in a day right?So wouldn't it make sense to focus as much of your time as possible on the things that produce the highest payoff.I don't know about you but most small business owners are do-it-yourself types and get sucked into doing the littlest silly work faster than you can say "Oh look, the copier is jammed again. The Key to Creating Total System Empowerment In this paper, I will:1. provide a framework for creating total system power at all levels and in all positions;2. 9 Things You Must Do To Maximize Your Chances Of Obtaining A Small Business Loan To get approval for your small business loan application, you must be able to meet the lending criteria set down. Some organisations are more risk averse than others, and will therefore have more stringent criteria. Real World Accounting for Small Business Owners If you're like me, you love accounting. It's so fascinating and such an ingenious system. How to Integrate Yourself in Someone Elses Business When do you need to get more involved with the day to day activities of your business partner?The best business relationship you can have is one where the client does not know whether you are a contractor or whether you are an employee. Working alongside the client, you are the one that offers solutions to problems. A Small Business Consultant Can Help in Many Ways... But One Thing He Can't Provide A consultant must remember that the business belongs to the client. There is always a danger that the consultant will take a dominant position to the detriment of both of them. Street Wars Between Mobile Car Washers and Mobile Auto Detailers There is much competition in the mobile auto detailing business. There are two different lines of reasoning emerging as to how the business should be run. Financial Strategies for a Mobile Car Wash Business Plan Writing a business plan for a mobile car wash is fairly easy, yet often operators fall down in understanding the financial strategies and costs. Bankers and Investors alike will want to see that you have a well thought out business plan to insure your start-up goes successfully.
|
|
Small Business Information | Traffic Building Information Powered By: Work At Home With Google - FREE! |
| © 2006 |
