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Engel & Völkers Licence Partner Regional Office Belgium > Blog > Location qualities under scrutiny: territorial protection in franchising

Location qualities under scrutiny: territorial protection in franchising

In order to create internal equality between franchisees, to ensure the widest possible supply and to maximize the efficiency of each franchise branch, franchisors usually rely on a territorial protection contract. This reciprocal concept assures every franchisee the exclusive brand-specific distribution rights in his predefined spatial area, but at the same time assumes that neither violates the autonomy of other licensed territories. By choosing a license area, you set key parameters for the success of your franchise business - the following Engel & Völkers advices show you the most important factors that you need for this decision.

The right choice of location, for example in the context of the preparation of your business plan, requires comprehensive and in-depth knowledge of the specific concession regions. Even areas that are very similar based on external factors such as total area, degree of urbanization, size of population, transport links or purchasing power per resident can vary greatly in other features that are only apparent at second glance. What is the age structure of the population? What role does tourism play in the region and your franchise project? How many competitors are there already? What about the delivery or supply of goods in this region? These and other questions will help you to consider the value of a location for your startup as a franchisee. However, the sheer amount of information quickly becomes quite confusing for newcomers - in which case the advice of a geomarketing expert to assess the situation is advisable. Numerous agencies throughout Germany offer services for the analysis of spatio-economic phenomena and, especially when choosing between more than two locations, can provide important arguments for your decision.

The protection of your franchise area: Leave nothing up to chance

In order to avoid the fear of competition within your carefully selected area on the part of other franchisee candidates who would like to rename themselves under the franchise brand after their entry, the model of territorial protection described above comes into effect. In order to avoid conflict situations with the other franchisees, it is necessary to draw clear boundaries between the individual license areas. The mere naming of city names or postcodes is usually not enough: A basically competitive additional franchise, for example, which is located directly on a western city border, would woo the customers of the western city of your central location, so working with radius blockages is advisable. These borders and radii are either taken over from the tradition of the franchisor or worked out together - the latter usually in the development of a license area. For this purpose, the data previously collected by the geomarketing expert is extremely useful.

Always be aware that the status quo within your license area may change over the course of your franchise existence. A location that is now considered promising may lose its attractiveness through political, social or natural influences over the medium to long term, leading to equality debates among franchisees. Imagine that license areas can not be fixed structures but rather structures that are variable in the long run.

The proven license system by Engel & Völkers

Over the course of over 30 years throughout the company history of Engel & Völkers, we have steadily developed and optimized the systematics of our license area allocation and management. In the meantime, we have expanded our global franchise network to more than 700 locations over four continents. With new ideas and strategies, we are adapting to the ever-changing requirements of the real estate sector, for example by establishing the market center concept for major cities or tapping into new markets, such as Husum and Sankt Peter-Ording. Engel & Völkers will continue its expansion plans in 2018 - the ideal opportunity for you to gain a foothold in the real estate sector on an independent basis. Benefit from the advantages that make our prestige as a competent partner for premium real estate makes possible from day one: A well-known, attractive CI, our extensive contact network and our powerful IT and system tools are valuable assistants for a smooth market launch. Choose either from the Europe-wide offer of our free license areas, or talk to us about the opening of a completely new location.

The following link provides an overview of the currently free license areas. Are you interested in a franchise partnership with Engel & Völkers? We will be happy to discuss the project with you and your specific business plan. We look forward to your inspiration.

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Engel & Völkers
Licence Partner Regional Office Belgium

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