Seek out a competitor franchise if territory is not available with option 1?

My business partner and I were looking into a pretty niche franchise space. We were aware of this particular business from previous interactions (they serviced a piece of our business that we outsourced). For more reference, the owner of the nearest territory for that franchise would occasionally service areas outside of their territory. And one of those territories was where we are located. Example: He owns Territory A and since nobody in the franchise owns Territory B, he occasionally services that territory. We decided that we would look into investing into that franchise and owning territory B. Turns out we are a few months too late. That same business owner is expanding his footprint and has already acquired territory B. We are heavily engrained in a complimentary service and we know the impact that franchise has. It's niche, like I said, and with great margins. They have few competitors, with nothing close to the national footprint they have. They don't have it completely cornered, but pretty close. My question: Since we know it's a solid profitable business, and we are in a great position to run it parallel to what we are already doing, we have three options we are considering. 1. Do we work with a competitor franchisor in the same geographical space and compete? (I believe we have an advantage in local business relationships). Option 2: Do it ourselves (however, there are equipment "build out" and technical training that particular franchise has that is largely the reason we would want to franchise). Option 3: Drop the idea, and look for investments elsewhere. Curious to see if anybody else has run into a situation like this, even if it's outside of franchising. Thanks.