How many territories will my franchise network support?

When you have a successful business and want to expand its reach through franchising, understanding how many franchise territories to have is vital.

It’s tempting to think that to maximise your revenue, you have to offer as many franchise territories as possible.

But be wary – this approach could lead to poorly planned territories that leave your franchisees struggling to find success. And you could be left with unhappy franchisees and cause irreversible damage to the brand that you have worked so hard to build up.

When planning the number of franchise territories to have, the key thing to understand is that each one must offer your franchisees an equal chance of success.

And to achieve this you’ll likely need data – from your own company and from other sources – and the right analysis of this by experts such as Tech4T.

Solutions such as Tech4T’s Franchise Territory Optimisation service use specialist location intelligence data to give you a clear picture of which locations are best for your business, how big territories should be so they all have the same sales opportunities, and the optimum number of territories to have in any country or region.

It might seem easy to divide up a country or continent into areas of equal geographical size and offer those as franchise territories, but this fails to take into account all the factors that affect success. 

Data such as transport links, travel costs, road networks, geographical features, and even local legislation, can all feed into decisions about how easy it will be for franchisees to attract customers, make sales, and run their business efficiently.

It’s also true that having a successful franchise territory is not just about the number of people that live in an area.

It’s far more important to focus on where the best opportunities for your business will be and base your franchise territories around them, using analysis of where target customers are, including the locations of higher value prospects.

Data such as the age and gender of the population should be considered alongside sales data you currently hold and more behavioural information such as customers’ leisure choices and buying habits.

These can all influence the set-up of your franchise territories and help define the optimum number of territories to have in your franchise network.

You’ll also need to take into account where competitors are operating – or are likely to set up in the future – so that you don’t offer territories that look good on paper but are far harder than others to make a success. 

It’s also vital that territory boundaries are properly defined so that there is no unintended crossover or competition for business with another of your own franchisees, each chasing the same prospective customers.

Information from your company will also be useful in deciding how many franchise territories your business will be able to support, for example in terms of the extent of marketing or administration resources available. This will also help you decide the balance between the number of franchise territories or taking on extra staff to work with them.

As experts in franchise territory planning, at Tech4T we utilise our custom developed Territory Runner Location Intelligence System to provide all the information businesses need to make data-led franchise territory decisions. 

The system features easy-to-understand fully interactive maps that can be interrogated at any level – from postcode/zip code level all the way to international – to make it simple for businesses to plan exactly the right number of franchise territories.

It also allows you to share selected information with franchisees to help them grow their business, and see the opportunities open to them in their area.

Prospects in any area can also be segmented and filtered so that each franchisee can focus on those areas with the most potential to maximise their success.

Using data is vital when you are first setting up franchise territories, when you are planning on the number to have, or even when you are looking to add more territories to your existing franchise network.

Whatever the timing, Tech4T can help you and your future franchisees to succeed.

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This guide tells you everything you need to know about using territory intelligence, mapping software and demographics data to grow your franchise. Learn how to:

  • Present & sell franchise territories
  • Create new territories in new locations
  • Analyse & optimise existing territories
  • Restructure under-performing territories
  • Help franchisees find new leads and prospects

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