On what basis will 1 800 Packouts determine the territory size?
1_800_Packouts Franchise · 2025 FDDAnswer from 2025 FDD Document
d Business. We will not provide any hiring assistance, advice or guidance.**
ITEM 12 TERRITORY
You will be granted a territory ("Your Territory"). Your Territory will not be exclusive. You may face competition from other franchisees, from company-owned businesses, or from other channels of distribution or competitive brands that we control. Your Territory will be described in an exhibit to the Franchise Agreement and will be determined in our sole discretion based upon population density, demographics and other Franchised Business operations in the market. Territories may range from 1 to 1,000,000 people. Your Territory may not exceed a population of 1,000,000 people, in the event the population exceeds 1,250,000 people you will be required to purchase an additional franchise.
You receive certain marketing protection afforded you under the Agreement, and in consideration of your participation in our national/regional programs. Such are collectively referred to as our National/Regional Opportunity Protection program or "NROP." As we enroll insurance companies, third-party administrators, or other similar organizations in this NROP program for the benefit of the System, our objective is to benefit our franchisees; however, we cannot assure that any enrollees in our NROP program will provide you such benefits in your Territory. Your NROP Fee is owed regardless if whether you enroll in all, some, or none of the NROP programs.
Source: Item 12 — TERRITORY (FDD pages 40–43)
What This Means (2025 FDD)
According to 1 800 Packouts' 2025 Franchise Disclosure Document, the territory size is determined at their sole discretion. The primary factors influencing the size of a territory include population density, demographics, and the presence of other franchised business operations already in the market. Territories can range from 1 to 1,000,000 people.
For prospective franchisees, this means the territory you are granted may vary significantly in size and potential customer base. The fact that 1 800 Packouts retains sole discretion means franchisees have limited ability to negotiate the size or characteristics of their territory. The FDD specifies that if a territory's population exceeds 1,000,000 for two consecutive years, the franchisee may acquire an additional territory of up to 500,000 people for an add-on territory fee of $30,000, which also increases the NROP fee by $1,000.
It's important to note that the territory granted is not exclusive, meaning franchisees may face competition from other franchisees, company-owned businesses, or other channels of distribution. Additionally, after the second year of operations, 1 800 Packouts reviews the franchisee's gross sales, which must meet a minimum sales quota of $1 per person in the territory. Failure to meet this quota may result in assistance from 1 800 Packouts, a reduction in territory size, or suspension of exclusive rights. Consistent failure to meet the quota can lead to termination of the franchise agreement or adjustments to the territory size.
Prospective franchisees should carefully consider these factors and evaluate the potential market within the assigned territory. Understanding the demographics and competition in the area is crucial for developing a successful business strategy. Additionally, franchisees should be prepared to meet the minimum sales quota to avoid potential penalties or loss of territory rights.