Franchise Territory Design

Once you’ve mastered your franchise concept, the most important ingredient to success as a franchisor is getting the right franchisees in the right locations.

Franchise Territory Design is a service of Analytics In Focus, the leader in creating territory alignments and territory design for companies of all sizes.  We can help you create balanced franchise territories with enough market potential to give all of your franchisees the best chance of being successful.

We offer solutions to fit everyone’s budget.   If you have the time and skills, but little money, we provide detailed instructions that allow you to build franchise territories for free.  Alternatively, you can eliminate all the work and purchase low-cost pre-designed territories for the most common franchise needs.  For established franchisors with existing franchisees, we offer the highest quality custom-designed territories to meet your needs.

Territories with insufficient market potential lead to unsuccessful franchisees.  One of the worst situations that franchisors have to face is the damage to goodwill and reputation that occurs when a franchisee goes out of business because sales are too low.  On the other hand, territories with too much market potential can mean lower penetration of the market, and therefore lower franchise royalty fees.  The profits of the franchisor are diminished and competitors appear when franchises aren’t satisfying all the demand in an area.

Only by carefully balancing each territory can you be assured that all of your franchisees have the same chance of success.

The Honeycomb Effect is a term used to describe the problem of holes in your geographic coverage that occur when you create territories one at a time, without a master plan.  The figures on the right demonstrate this problem, where two territories were created independently of each other, and leaves a coverage hole between the two.  The remaining geography between the two is insufficient for a third territory, and those potential sales can be lost permanently.  A better solution, on the far right, is to design the territories so that no coverage holes are created.

When new franchisees enter an established major metropolitan area, the travel time between franchise locations may be small enough that customers switch from one location to another.  This should be your goal as a franchisor – to provide your end customers  with a positive experience in multiple convenient locations.  What you don’t want are problems of in-fighting among your franchisees accusing one another of taking each other’s customers.  With a Franchise Territory Design plan, you can identify those areas ahead of time, and plan to sell multiple unit agreements to those franchisees that are in locations saturated with enough potential to support multiple units.