Latest / Franchise Conversations with Fexingo: Buying, Running, and Scaling Franchise Businesses
Franchise Territory Saturation and Cannibalization
Most franchise systems promise growth through expansion, but the real threat to profitability is often internal competition. In this episode, Lucas and Luna explore the concept of territory cannibalization, where new unit openings erode the sales of existing locations rather than adding net new revenue. Using a specific case study from a major quick-service restaurant chain that expanded too aggressively in dense urban markets, they break down the math behind unit density and how it impacts individual franchisee margins. The discussion covers the difference between market penetration and…
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