5 TIPS IF YOU ARE BUYING A MOBILE FRANCHISE

Peter Buckingham, Spectrum Analysis managing director, shares his expert tips on franchise territories…

Most mobile franchisors sell you an area and the main purpose of this is:

• To guarantee you the leads that are generated if they have a call centre or a web-based contact system.

• To give you security that all the leads from within your agreed area are coming to you – and not being given to a company operation or some other franchisee, or just being lost in the system.

When buying this business expect that other franchisees will service clients in your area – they may have been requested by the client.

What you want is an agreement that you have the sole right to actively market in the territory. For instance, you are the only one who is allowed to make a cold call, drop a letter into a letterbox or put up a sign in a bus shelter in your area. You can think of many more ideas, but the concept is that you are the active marketer.

So if you are going to invest in a mobile service franchise, what should you be looking for?

1. Has the franchisor got skin in the game, and been prepared to run the mobile franchise they are selling? Can they show you evidence that it can be operated profitably?

2. There is a defined territory that has been established on a logical basis not a map drawn up by franchisors and franchisees without any research.

3. Is there logic on how many territories can be sold in the market, so that each territory should offer similar opportunity for the franchisee? Whether this is based on number of swimming pools, number of new building permits, total number of people of a certain age group or demographic or numbers of target businesses – there must be some logic, and not the wet finger in the air approach.

4. Make sure the territories are properly defined, preferably on a map showing the boundaries, and backed up by a spreadsheet showing the postcode / suburbs, and whatever relevant data has been used by the franchisor in their decision-making.

5. Make sure in your agreement there is a clear understanding on what is your territory, and there is minimal opportunity for the franchisor to make any alterations throughout the current life of your franchise agreement.