What Is a Franchise Territory and Why Is It Important?

To prevent market saturation, many franchisees are granted a defined area where they can do business. Budget Blinds is ready to help you learn more about how franchise territories work, why they’re important, and how they’re mapped out.

The franchisor defines the franchise territory and details are outlined in the franchise agreement. You can find an overview of the territory details in the franchise disclosure document (FDD), a legal document that franchisors provide to prospective franchisees before any agreement is signed.

There are more than 4,000 franchise brands in the U.S. and they each have their own territory guidelines. Franchise territory mapping is based on factors, including zip codes, physical boundaries like rivers or highways, or demographic criteria such as population size or income levels. Many home services franchises, like Budget Blinds, define their territories geographically by the number of households. Alternatively, a fitness franchise may outline its territory by the population in a designated area. The territory of a stand-alone fast-food restaurant is typically measured in miles, often excluding non-traditional locations, such as airport shops or grocery-store kiosks, from these distance parameters.

Territories help prevent franchisees from competing against each other for customers. Having a defined franchise territory allows a franchisee the ability to focus on their single area, become an expert in their market, and make decisions based on specific customer trends. About 53% of franchisees own multiple locations or territories.

Types of Franchise Territories

There are three main types of franchise territories:

• Exclusive: An exclusive territory gives the franchisee the sole right to operate the brand in a certain area. Finding a franchise that offers an exclusive territory is rare and locations typically must hit sales targets to maintain exclusivity.
• Protected: Similar to an exclusive territory, a protected territory prevents another franchisee from opening in a defined area. But franchisors may have the right to open locations in the area or sell products online. Typically, franchisees must obtain permission from the franchisor to serve clients outside their protected territory, even if no other franchisee owns that area.
• Open: With an open territory, franchisees might share the territory with other franchisees of the same brand. Open territories are common in less saturated markets or newer franchises.

The Budget Blinds Territory Advantage

Budget Blinds stands out by offering franchisees flexible and protected territory options. Our tiered territory strategy ensures you’re making an investment that fits your budget and business goals. The top tier has 36,000 households or more, tier two has between 25,000-36,000 households, and tier three has less than 25,000 households. We also offer discounts if you purchase multiple territories.

“All our territories are protected so we’re not competing with each other,” said Stacey Behan, franchise owner in Newport and Warwick, Rhode Island. “If you’re willing to put the work in, you can be successful.”

Budget Blinds is North America’s No. 1 window coverings and blinds franchise. We have nearly 1,500 franchise territories serving more than 10,000 cities and there’s still room for expansion. We’re searching for entrepreneurs who are detail-oriented and have strong business acumen. You don’t need contracting experience to succeed as a Budget Blinds franchisee. Budget Blinds has the tools and training you need to launch a franchise in your community.

Find out More About Budget Blinds

If you have questions about franchising and are wondering if it’s right for you, we have a brief quiz that will provide valuable insights about your business and leadership potential and see how you can leverage your existing skills as a business owner.

Inquire now to take a franchise quiz and connect with an expert from the Budget Blinds team!