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The Exclusive Territory Illusion

The Exclusive Territory Illusion

At HealthyYOU Vending, we believe you should be able to expand your healthyYOU vending franchise business at the rate YOU determine, and in any location you choose. You should also be able to expand into other locations offered to you – or decline to do so with no consequences. After all, this is YOUR business, and these decisions should be made at YOUR discretion.

Some healthy vending companies have been pitching to prospective distributors how great it is to have an “exclusive territory.” Exclusive territories are great for the vending company – but NOT for the distributor. On the surface, exclusive territories sound great. If you live in North Dallas, why wouldn’t you want the exclusive on the North Dallas territory? As you dig a little deeper, you’ll discover two main reasons just why not:

* Boundary restrictions

* Loss of exclusive territory

Let’s take a brief look at each one:

Boundary Restrictions
Let’s say you purchase 10 vending machines from a company offering “exclusive territories.” You place your 10 machines and get your business up and running. A few months later, you get a call from one of your locations – a large fitness center in North Dallas. The owner, who loves your vending machine, showed it to his regional manager. Now the regional manager wants you to place six more machines: four in South Dallas and two in Fort Worth. What a great opportunity! Except that every single one of these locations is outside of your territory. You cannot place machines in these excellent locations, even though they are seeking you out. The best you can do is to refer the locations to the vending company and hope that you will receive a referral bonus – a far cry from having six more busy locations generating revenue for you.

Loss of Exclusive
Now, let’s say this time you hold the exclusive territory in South Dallas. Great news! You just received a phone call from the vending company regarding the scenario above. Four of those six locations are in your territory and the vending company is offering them to you (for a locating fee, of course). You tell them that you are very interested but that you are not quite ready to expand. Your business is just getting off the ground and while things are going well, you are not financially able to immediately purchase four additional machines. You ask the vending company if you could have 60-90 days before you make the purchase, but you’re informed that this is NOT possible, as the fitness chain wants machines put into their locations immediately. So the vending company offers you two choices: You can buy four more of their machines before you are financially able to do so and keep your exclusive territory. Or, you can give up your right of “first refusal,” thereby allowing the vending company to sell machines to another distributor to place in those four locations. Your “exclusive territory” is now null and void.

The illusion of the “exclusive territory” on a HealthyYOU vending franchise is one of the many serious pitfalls often hidden in the program of some vending companies. It may be due to inexperience or they may just be stacking the deck in their favor.  Either way, “exclusive territories” are certainly not in your best interest.

Have questions about territory restrictions? Contact your HealthyYOU Vending representative. We’re happy to help!

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