How much is your franchise territory worth?

fFranchise territory value and income projection – Give your franchisees the comfort factor.

Franchise Territory AssessmentWhether your franchise is new, established or expanding, potential franchisees will want to know the franchise territory value and the methodology used in creating your territories. In addition, the provability of income projections for each franchise territory or outlet is a vital part of the franchisee recruitment and sales process.

It stands to reason: more facts = more comfort = higher probability of sale to franchisee.

However, income projections are frequently based solely on sales figures from another territory containing, say, x households or y companies.

Such comparisons can be misleading as there is no further breakdown as to the types of people actually living in those households or the types and sizes of the businesses operating there, or most importantly, where they can be found in relation to the location of the franchisee.

To arrive at a franchise territory worth, at best an educated guess has been made based on past performance and markets.

What is missing is the link between sales performance (including recency, frequency and value) and territory geography. Information such as the size and location of the franchise or sales area, the numbers and types of current and potential customers, and where such customers are positioned spatially.

Not all households or businesses are your potential customers and many will never have a need for your products or services or may be too far away. Hence the need to establish the facts!

Gain clarity and certainty about franchise territory worth and income projections

This is best done by an in-depth analysis of your customers, enquirers and sales figures in relation to territory geography and the actual numbers of your target market in a given area.

Such work can be carried out on information from an existing business, a proof-of-concept or pilot franchise area, or several franchise territories.

[pullquote style=”left” quote=”dark”]80% of customers resided within a 15 minute drive-time[/pullquote]

This exercise will not only give provability of income projections to potential franchisees, but also give you, the franchisor, detailed insights into your business model.

See where your customers and prospects are geographically

The visualisation of your customers and prospects geographically, classified in multiple ways – by value, type, venue, salesperson … whatever is relevant to your business can help you and your franchisees assess what needs to be done from a sales and marketing perspective. This is something that is crucial to a new franchisee to maximise franchise territory worth – especially how far away they need to travel to close the sale or how far a customer is willing to travel to participate in services or take product.

For one client, a simple customer drive-time map revealed that 80% of customers around 3 franchise locations were to be found within a 15 minute drive-time of each site! Useful information when thinking about where next to advertise or where to leaflet drop.

Mapping your world provides an accurate comparison of territory performance taking into account drive times and actual market potential in each territory helping you to determine the franchise territory worth and the factors influencing sales in your best performing franchise territories.

Ask yourself as the franchisor; Is there higher market potential in the first place? Are prospects in closer concentrations geographically? Is the road network good? Or is the franchisee in a better performing territory simply more dynamic than others?

Conversely, are any of these factors hindering franchisees in poorly performing territories? Mapping can help you see things that ordinary spreadsheet analysis can’t reveal. To coin a well-used phrase; a picture does indeed paint a thousand words.

For more information please use our contact form to get in touch with us or follow this link to a more in-depth look at franchise territories.

Why not have a look at this case study to see how we helped Kids Academy gauge their franchise territory potential.

 

 

Franchise Territory Assessment

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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
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  • Restructure under-performing territories
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