Article 2. EXCLUSIVE AREA OR TERRITORY
2.1 Exclusive Territorial Aspects and Minimums.
None.
Each franchised territory will be determined according to individual restaurant dynamics, because I recognize that different dynamics come to play depending on where the restaurant is situated. These parameters are as yet to be determined.
As written in the UFOC Item 12,
At this juncture, Freakie Fries will not give exclusive territory rights. The Association may amend this by a majority vote.
I have already seen two Waffle House restaurants on opposite sides of the same highway exit.
Subway restaurants are so common, that as an over-the road trucker, I feel that there’s a better than 50/50 chance that the next exit will have one, and none of them appear to be hurting because of this.
Many times, with regards to where someone will eat, it is what’s available along their path. Some may go out of their way, but I believe time is tight for most.
And so, for Freakie Fries, granting exclusive territory rights, doesn’t look appealing. In fact;
The more Freakie Fries restaurants in a given advertising territory, the better for all involved, as this will lessen the shared advertising costs; and furthermore, the Franchise Association Operation Dues will be less because there will be more franchises to share the costs.
Also, the frequent presence of Freakie Fries to an individual's awareness is favorably enhanced. They think and associate success to Freakie Fries…‘They must be good, they’re everywhere!’ they will think.
Also, commissary delivery costs are reduced;
Employee sharing programs, manager sharing programs, if in place, work more smoothly. If one restaurant is swamped, an idle employee from a nearby Freakie Fries may be transferred to ease the crunch.
A franchisee may decide to open at a more favorable local just up the street, where he/she has observed and believes to be a better place for business, and still keep the original one going. He/she may end up keeping both.
Maybe there should still be an avenue for preventing an encroachment if it can be shown to a jury of peers, that an already existing Freakie Fries would be hurt by one being opened right next door by another owner. The object here is to give reasonable guidelines as decided by the Association majority. We’ll put it to a vote ahead of time and have some policy in place before too long.