GeoMetrx

A Service of Geographic Enterprises

5 Tips on Developing Franchise Territories

Geometrx franchise mappingFranchising is an avenue to growing a business, whether you are trying to expand within the country or grow internationally.  Entrepreneurs willing to invest in your business and develop a business of their own, are prepared to pay for quality territories, or sections of the country, state, or area.  This makes developing your franchise territories critical to both your success and the purchasing entrepreneur.

Ignore the Misconception That Bigger is Better

Thinking a vast territory is the best is only a myth. It’s not the extent of the area, but rather the potential of target clients within it;  even a large territory will struggle if there is not enough of your ideal demographic.

The same could be said of small territories. They may be easier for salespeople to navigate, but there may not be sales potential to warrant limited boundaries. On the other hand, large territories can likewise have an overabundance of potential which no single franchisee would ever satisfactorily service.

Land Barriers and Unfair Boundaries

Say you select a boundary for a territory sketched out on a map, but on closer inspection, you find land barriers such as mountains, lakes, streams, etc.  Is there more than one convenient way for the franchisee to cross these natural barriers?  If not, redraw the territory completely before selling this area.

Many franchisors start out using zip codes to divide up territories.  The challenge for franchisors is creating fair territories when some zip codes are more desirable than others.  Another consideration against zip codes is whether or not they will remain intact.  If the Postal Service moves the zip code boundary line, this can affect franchisees.

Fairness and Boundary Equality

Size does not matter when it comes to the sales potential of a territory as we stated previously. Each area does not need to be equal in size to be “fair.”  Mapping territories based on business opportunity will allow for a more successful franchise.  When the potential of the regions are balanced out, the franchisor is better able to compare and manage franchisees.

Keep Room for Improvement

Notwithstanding current conditions such as organizations and sales potential within a franchise territory, one should likewise consider what’s to come.  If your business doubled in 5 to 10 years, would the franchise territories you’ve established today keep pace or suffer?  Addressing future issues now – will your pricing model allow room for expansion and customer spread, would be optimal during this process.

During the franchise sales process, potential franchisees will question you on the determination of franchise territories, as well as the territory conversion rates.  If the conversion rates are acceptable and you have demonstrated they were carefully vetted, a franchise sale is far more likely.  It is all about the correct combination of customer numbers and demographics, room for growth potential and the “right” products or services, that will bring your business growth success through franchising.

Optimize Your Franchise Territories Today

The task of mapping the opportunities and potential to build equitable territories that are valuable to franchisees can be daunting without both experience and tools.  There are basic mapping software that you can employ, and if you are familiar with demographic data, you can piece together franchise territories.  However, at GeoMetrx, it’s our business to create a dynamic map overlaid with multiple data points of what every territory’s potential looks like to give our clients a clear view.

Contact GeoMetrx for a free demo today.