Hidden Corners: How to Select a Territory for Your Home Improvement Franchise
When you are researching and courting a home improvement franchise brand as a potential partner, I can’t overstate how important it is to ask the right questions about the franchisee territory you would cover. This article from Forbes is on the right track, suggesting key questions such as what the criteria for identifying territories are and whether the territory is exclusive or protected.
Here are a few common questions I encounter from entrepreneurs interested in ShelfGenie.
Is the Territory Exclusive/Protected or Open?
ShelfGenie uses a protected territory model. Once a franchisee purchases a territory, they own that territory. ShelfGenie is not going to sell any portion of that territory to anyone else.
When working with a prospective franchisee, we first must determine whether the area they are in — or the area they are interested in working in, is available for ShelfGenie. If it’s already sold, it’s not an option for them, because the territories are protected and don’t overlap.
Regardless what brand of franchise you ultimately decide to purchase, be sure to investigate what rights you have in your territory, and don’t be shy about contacting existing franchisees within a system to ask questions about whether they feel their situation is reasonable and enables them to continue to grow revenue and success.
How Do You Determine the Right Territory?
Our territories for a ShelfGenie home improvement franchise are all based simply on the number of households.
For our executive model, it’s a minimum of 125,000 households per territory. Then we have an owner-operator model, which is aimed at some of the more rural parts of the country that don’t have the population density to support 125,000 households. This model is based on a minimum of 75,000 households.
The boundaries territories are defined by ZIP codes. A ShelfGenie territory is a cluster of contiguous ZIP codes (for the executive model, they’re going to add up to at least 125,000 households; for the owner-operator model, they’ll add up to at least 75,000). We won’t split a ZIP code, such as half in one territory and half in the next.
What About Demographics?
Assuming the territory is available, it’s a matter of mapping out the territory. Some franchise companies, depending on the type of product or service they offer, really get into looking at certain demographics and data, such as the average cost of a home in the area, the average income of a household, age, and other factors. We really don’t drill into that; we’re just looking at the number of households.
We take this straightforward approach because our success is based on simple math. If you’ve got a territory of 125,000 households, ShelfGenie’s average job or sale amount is around $3,500. So, if you can get your business to the point where you’re doing 300 jobs a year, you have a seven-figure-plus business right there, based on our average job amount.
And, in that scenario, you’ll have worked in 300 different households over the course of that year. That’s a small fraction of the territory that you’ve penetrated and still done seven figures in revenue. So, of course, not every one of those 125,000 households are going to be a ShelfGenie client, but you don’t need them to be.
As with most businesses, we can’t be everything to everyone. We must understand who our target is, and then we know how to get in front of them.
Is Expanding to Additional Territories Difficult?
Many of our franchisees purchase multiple territories to start; because it’s a very low-overhead business. So, except for the franchise fee that they pay for the additional territory, they’re not adding more overhead by adding more territory.
Before they really understand our model, some people worry that their territory will be too big geographically for them to cover. But, ShelfGenie is a home-based business, meaning we don’t have storefronts or showrooms.
We go to our clients. As a result, the franchise owner himself or herself really doesn’t have to worry about physically covering the territory all the time.
Let’s say you have a territory that takes you an hour and a half to drive each way, from one side to the other. As an owner, you focus on developing a team of designers and installers who live in different areas within the territory. That’s who should be going to the customers’ homes. You, as the owner, won’t need to make that drive on a very regular basis.
This is one reason the ShelfGenie executive model of ownership is attractive for professionals adding a franchise as a side hustle.
Are Certain Markets More Desirable Than Others?
As noted above, our approach doesn’t rely on demographics and factors unique to a given market; it’s all about the number of homes.
The particular market for the franchise territory is not going to make or break the franchise in this business, as long as we have the right franchisee and enough households.
ShelfGenie Business Model and Support
We have highly effective tools and resources in place that allow franchisees to focus on scaling their business. Our franchise model allows the owner to focus on marketing and sales while leveraging designers, installers, and our centralized Business Support Center to handle most day-to-day activities of the business.
To learn more about ShelfGenie franchise opportunities, simply download our Franchise Information Report, and someone from our Franchise Development team will be in touch with you shortly. Now is the time to take advantage of ShelfGenie’s one-of-a-kind support to start your business and hit the ground running!