What is an exclusive franchise territory?

Heard the term ‘exclusive territory’ in your franchise research and wondered what on earth it means?

Let’s cover off the three key things you need to know about an exclusive territory in the franchising world…

1. What is an exclusive territory?

Service-based franchises often operate based on this concept of an ‘exclusive territory’. So what does it mean? When you buy your business, your buying a certain mapped area that you are permitted to trade in. That area is granted to you exclusively, and is protected by the Franchise Agreement you enter into. ‘Exclusively’ means that no other franchisee in the network is allowed to trade in your area; that all leads received in that specific area, are automatically sent to you, and only you. So, you’re never in competition with the broader network for work in your exclusive territory.

2. What size is my exclusive territory?

This one can differ significantly depending on the franchise network, but, in the James Home Services network the size of your territory is 2500 households for our interior cleaning franchises and our lawn mowing and garden care franchises. Over 30 years of operating these businesses in Australia, we’ve found that this size of territory is large enough to build a successful business, including staff if you want to run a larger business, whilst being geographically small enough that you’re not loosing productive time sitting in the car driving for 15 minutes between each job. You can’t always charge for the time you spend travelling, so it’s lost time; and we teach our franchisees strategies to minimise lost time in their businesses in order to maximise their potential income. We’re planning a blog dedicated to answering all your questions about the size of your exclusive territory, and why 2500 households is the sweet spot for our business owners. So, check back in on our blog in the coming weeks if you’re interested in diving deeper into this topic!

3. Why can’t I just run my business wherever there is a customer?

If you read the answer to the last question, then you might have already clued onto part of the answer to this question… because servicing customers all over increases your travel time… and more travel time, means less chargeable hours, and less income to your business.

But there’s also another really significant reason why we strongly encourage our franchisees to focus solely on their exclusive area… and that’s marketing! When we market for your business, we market only in your exclusive area. When you market your business, we encourage you to focus your efforts only on your exclusive area because a smaller focus area means your marketing efforts aren’t being diluted by a huge number of people to try and reach. Trying to reach just one suburb, through the techniques we use and train you in, is very effective. Spreading yourself too thin will waste your time, dilute your efforts, your costs will be higher and you’ll end up with large travel times between customers instead of all your customers grouped together in the one area.

We hope that’s been helpful in explaining exclusive territories. If your looking into a franchise, be sure to ask lots of questions about your territory because it’s such an important aspect of your franchise business.

If you’re thinking about buying a franchise or starting your own cleaning or lawn mowing business and you’ve got more questions… why not reach out? Submit an enquiry, and one of our team will give you a call for a chat.