What Is a Protected Territory & Why It Matters to Franchise Owners I The Real Franchise – Ep32

Rhiannon Hello and welcome back to The Real Franchise, a video series designed to deliver real information, real answers, and real insights into franchising. The series is brought to you by James HomeServices Australia. I’m the CEO and Justin is one of our owners and our head of new businesses. Together in this series, we tackle all of the big topics unscripted, unplanned and completely unfiltered.

No sales, no fluff. We just give you information straight up. Today’s topic is on request. We recently had a comment on a Facebook post of ours that asked us to talk very specifically about territories. And normally we don’t kind of get as specific on one small topic, but given its request, clearly it means that it’s important that people understand what we do from a territories perspective, and every franchise’s network is a little bit different.

So today we’re going to talk about territories. Justin, let’s start with let’s start with the basics first. In our network we do operate off of territories and we operate off of what we call a protected area or protected territory. Can you walk us through what that is?

Justin So protected area. Territory. And our network is an exclusive territory. It’s yours exclusively. So you’ll never have competition from another franchisee in James in that service. And there’s a whole range of benefits for that which we’ll talk about. And in our network, it’s 2500 homes is a protected territory for a cleaning franchise or a lawn and garden care franchise, which is about two foundation franchises.

So 2500 homes, which, is roughly the size of most Aussie suburbs. So if you’re wondering how big that is, well, generally it’s about the size of a suburb. And that data is all comes, is all in our system. And we got a fully integrated mapping system, which that data’s all come through, you know, bureau statistics, etc., through a Google mapping.

So literally our team at head office map a protected area. We talk it through with you and make sure and generally one of our strong recommended actions is your protected area. You should be living in it if at all possible. And that’s probably a whole nother discussion for another video, because, it’s that’s really in your wheelhouse that marketing it.

And, just it just really helps, particularly from a Google point of view. If you live in your protected area, it just really helps you move up the ranking very quickly.

Rhiannon It does. It also limits you travel time. We want to keep you as close to home as possible, and we’ll talk about that a little bit more in a minute. But the reason why that protected area is recommended to be around your home is to keep you as close to home as possible, less travel time. Normally people leave and you know their kids go to school in that same suburb as well, so it’s going to fit in perhaps a little bit more seamlessly with your life.

And that’s a big part of what we’re trying to do is make business ownership actually suit your life, not the other way around. That’s why most people come out of employment into self-employment, is that the 9 to 5 grind was just, you know, it wasn’t flexible. They’re looking for flexibility. So we’re trying to create that in our model.

But yeah, you touched on the other really big reason, which is Google. And I won’t go into a lot of detail, but suffice to say, it is really critical that with your Google business profile, which is like, you know, the good old Yellow Pages listing, right? If you weren’t in yellow Pages, you’re not visible to your market.

Same with Google. Now, if you’re not on Google, you’re not visible to your market. So we really do encourage and we provide an awful lot of assistance to have you on Google. We set that up and then we train you how to maintain it. And it’s a lot easier, as you say, to come to be viewed higher in the rankings, faster if you’re posting from inside the area that you’re telling Google that you’re servicing.

So lots of technical reasons there. But the short answer is we want to keep you close to home. And also, yeah, it’s easier to get you up those rankings on Google and seen in the top. Couple of results faster. If you’re actually living in and actively moving around that area that you’re servicing. Yeah.

Justin You know, I always say and network is all about people serving people. And, you know, if you live in that area, you often have, like you said, with school and the local corner shop and the local real estate, you know, you’ll have these natural networks that then allow you to really, instantly get yourself known and your community.

The other thing, you know, as you know, we pay to when people join us, we pay to bring their car or their trailer. And so you’re going to be driving in and out of home and you’re marketing constantly. Literally just before we started this video, I had a lady walk in the door here because when I was on my morning run this morning, I found a mobile phone on the side of the road, and it was intact and it was working.

So I put up on our community Facebook page. I found this mobile phone. Anyway, within an hour the owner had contacted me and she just came and picked it up and she went, oh, I see your James car driving around everywhere, you know, and and she said, and can I get the number for your cleaner? Because I need to get a regular service done.

So she’s calling Adam, who’s a local James interior cleaner now, and that’s the beauty. If you live in your protected area, people get to know you. And when they need your service, bang time. Instantly they start brand awareness. Oh yeah, I see that James cleaning car everywhere. Or the James Lawn garden car. I’ll call those guys. And so yeah, I do often have, I’ll be honest for taking people through the sales process.

I have people go, you know, like for example, in Melbourne, oh, I want the Melbourne CBD and I live out in the northern suburbs or in like I live up near Cairns, and I’ve often had people say, oh no, we want, you know, the Cairns City and I live in the Northern Beaches and it’s like, well, you’re defeating the purpose, you know, because people are going to see you in an orange area.

Yeah. And yeah, the residential areas or I find a real niche markets, you know, we earn more with better client base. But back to the territory thing. One of the other big pluses of this is it actually gives you an. Yes, it’s a protected area. You know, I had a guy, looking at joining us. He was talking to another network.

Another franchise network. And one of the questions I asked them was, how many franchisees do you have in my area? And they said, well, in your suburb, we have 13 franchisees offering the same service. Yeah. And he was like, well, how the heck am I going to do it? And I said, oh, there’s plenty of work out there, plenty of work for everyone.

Rhiannon And so what is it? Just a referral, like when a customer makes an inquiry? Like, how does that even work? Is it going team.

Justin Yep. Well, I know in this particular network what I do is the newest person on gets all the leads. So you know, as you’ve been on for a while, you’re right. You don’t need any more leads. You know what you’re doing. And so the new person gets all the leads. So which is really annoying if you’re.

Rhiannon If you’re trying to grow your money, stream it.

Justin And this is why this guy run us because he’s like far out. My biggest competition is going to be my own people wearing the same shirt.

Rhiannon Yeah, yeah, it’s just not how we work is that, you know, when and I was and I was going to sort of, go into the detail of what exclusive territory means. And really, you’ve just you’ve just explained it, which is in our network. There is only you in your suburb, that area that we give you. That’s it.

There’s no one else wearing the same shirt as you. There’s no other James business owner offering that same service. If you’re lucky, you might have luck if you’re an interior cleaning business owner. If you really fortunate, we might also have like a lawn and garden care business owner in your area. And that’s the best scenario because then you guys can work together.

You can refer work if you’ve got a client that needs lawns done, hey presto, I’ve got someone who can help you and vice versa. That’s a wonderful scenario when when that happens in our network, it’s it’s great. It benefits both parties. But what it does mean is when we get an inquiry from a customer and it’s in your area, that lead goes to just one person.

Exactly. You’re not in competition with anyone else in our network. Sure. That customer may have rung other independence, other franchise networks that obviously, you know, it’s a free market. Customers shop around. We understand this, but you’re absolutely never going to be competing in against another one of our business owners. And that’s a really important point for us. You know, we really pat ourselves on having a model that works, but is full of integrity and and just acting in the best interests of our business owner.

And I feel really strongly that having you compete against one of one of our own just, I don’t know, just feels a little bit off to me.

Justin Yeah. So that’s the first thing that I always say to people. Is it you don’t have the competition because it’s your exclusive. Second thing I always say comes down to a cost thing. You know, I so often have people say to me, oh, now I can service half of Melbourne or I can no, no, no, I’m happy to look after, you know, the bottom half of Brisbane and it’s like you’ll go broke doing that, you know.

And from a marketing perspective it’s diluted. You know, when, where when you’re marketing particularly online, we can really focus the advertising and and so what we’ve learned in that business. Yeah. Yeah. From a service point of view, if you’re driving more than 20 minutes to the average job in a cleaning alone business, if you’re driving more than 20 minutes for the average job, you’re losing money.

So you don’t want to be traveling far, right? So one, we can concentrate the advertising. And so that will save you money. And particularly if you can nest like I know so many of our franchisees, what I love about their business is they can duck home for lunch. You spent 30 years driving. They don’t have to work, and now they can have lunch with the family and go back out.

Those sorts of things are big benefit. So cost is another thing. Yeah. And we also give people a privileged area. Right. So we have a protected area which is exclusive. It’s in your franchise agreement. That’s yours. But then we have a privileged area because obviously we don’t want to be turning away customers. And so general rule of thumb, that 20 minute thing often comes into, you know, we work with you and work out okay.

The general, it’s the suburbs around where the new business, it lives, we turn on as well. So any inquiries from that area. So it just gives you a larger catchment area while you’re getting going. Well, cash flow is king and all of that sort of stuff. And then as you build up your customer base, what you’re trying to do is nest your clients so that they close to the heart.

Rhiannon Yeah, exactly.

Justin So the second key thing is, is cost.

Rhiannon Yeah. And I just want to go, back to talking about marketing, and you mentioned the word dilution. And that’s a really, really important reason why it’s also important to keep you close to the home and have that more consolidated area that you’re focused in, because when you’re first starting your business, your number one goal and also your biggest challenge is getting customers, and that’s probably the nerves point or the nervous point for most new business owners.

And probably a question you get asked ten times a day just in is how am I going to get customers? You get customers from marketing, we market, you market. We’ve done videos on all of these. We’ve talked about how we work in partnership with our new business owners in a lot of lurid detail. So go back and check out some previous videos if you want more information on that.

But a more consolidated area means that the marketing we’re doing and the marketing that we’re teaching you to do is focused on that area. So that suburb, that is your protected area, what it means is that we can reach more of those people more frequently than if you’re trying to market to an enormous area. Right? So if you’re trying to market to an enormous area you might reach, you might still reach the same number of people, but they’re spread all over.

And as we’ve talked about you driving here, there and everywhere, trying to service people, what it can achieve when you’re focused on a smaller area is saturation. So it’s faster to reach the majority of the people in your area with the marketing techniques that we teach you. And once you’ve reached those people, then we start to reach them again and again and again.

Because we know in marketing and what we teach our new business owners is that it’s about two things recency. Frequency. Recency is how recently have they seen your brand frequencies, how often now the frequency is really important because people need a couple of touchpoints with your brand before they will remember you when they need you. So they must see the James brand potentially in excess of, say, 3 to 7 times before you’re literally on the front of their mind when they’re going, I need to clean up or I need someone to my my lawns.

Now, if you’re trying to market to half of Melbourne or half of Brisbane, how often do you think your marketing efforts and hours can reach all of those people to build that frequency so that we’re sitting on the front of your customer’s mind, it’s almost impossible to achieve. However, that’s why we give you that smaller, more consolidated area, because between your efforts and our efforts, I know that our marketing is being shown sometimes to 3 to 5000 people every week.

That’s just our marketing in your area. So and your area is somewhere whilst it’s 2500 households, generally your area is somewhere between seven and a half and 10,000 people. So that means that we’re actually getting our marketing seen. But almost sometimes up to a quarter of your whole area every single week. It’s creating saturation. And our marketing can’t achieve that.

Your marketing can’t achieve that. If we’re trying to grow broad, we’re diluting the efforts. We’re diluting your time spend. So it’s very strategic for very good reason. We teach you all of those details. This is why sometimes a franchise network can be such a leg up when you’re trying to get started, because we know all this stuff when we just teach it to you.

Justin Yeah. And the third, I think, point I always say to people about a protected area is it gives you an asset. Yeah. To sell, you know, it helps your customers to identify it. You know, you’re not just James Lawn and Garden, you’re James Lawn and garden in, the Ormeau in on the Gold Coast, right. They know.

Okay. So you looking after that rough area and and if they’re in New South Wales, they’re not going to ring you for a yes to get their lawn stuff. But it gives you an asset to sell. And it’s a big part. Like I’ve had three cleaning franchises myself over the years and, and I was able to build those customers.

Someone came along, bought that business and knew that I could walk into it and have these existing customers in that area. It’s exclusive in a way that I go and pick up and run the business. So it’s yeah, it’s a real key part of adding value to you. Yeah. You know, in another business, if you just have a franchise and it’s scattered everywhere, it will.

Yeah. Is there really much to it if you’re buying it?

Rhiannon Even going at as, as an independent, you know, there’s there’s probably a lot of people that look at us, just kind of doing their homework, you know, they’re pretty sure they can do this on their own. And they just kind of think, well, you know, maybe I should check out franchises, just see what they’re offering, right? Plenty of people that check us out from that perspective, kind of with the intent that really they going to go out on their own.

And so one thing I would say is, if that’s you, if you’re in that boat and you’ve got the skills and you’re reasonable and you know, you ready to back yourself and you’re going to go out on your own, take what we’re talking about and do that in your business. Right? Yes. You’ve got to build the you’ve got to build that asset.

You’ve got to build that business close to home. The other thing about, you know, doing this with the franchise network and us having that exclusive territory that’s yours, it means that when you come to sell, you can give the buyer assurance that your clients can’t jump ship to another business within our network, at least. Right. In other networks.

And, and the biggest risk when you sell a service based business like ours is that the clients, you know, they feel a little bit uneasy. Is my service going to change with the sale? What does a sale mean for me? And they might get nervous and start looking around for other service providers, at least in our network.

What our model means is that they are clients of that business and that area and that is protected. So even when that passes to a buyer, the buyer has a level of security that those customers are going with that business. And if the buyer does the right things and follows all of our systems, there’s no reason why they can’t be maintaining the satisfaction level of those clients and keeping them in other networks.

So when you’re out on your own, it’s sometimes really difficult to stop your clients going elsewhere in a sale situation. So it’s just another layer of protection, security, certainty, value, because a buyer is looking for basically a buyer, particularly in our service industry, a buyer is looking for how many customers do you have and what’s the turnover and profit of your business.

That’s kind of what they’re looking for. More security. You can give them around that high the value they’re wanting to pay.

Justin Yeah. Yeah.

Rhiannon Perfect. I think we’ve kind of covered everything about territory. So that one was short and sweet, hopefully packed full of information. I hopefully that’s giving you something to sink your teeth into and think about if you’re listening along. Yeah, I hope that was helpful. And if you have a topic that you’d like us to discuss, throw it in the comments below.

Because this topic is being discussed because someone asked for it. I love that we can be responsive like that. Otherwise, I hope that this has been helpful and I hope that you join us for the next episode of The Real franchise very soon.