FAQs about franchise territory mapping

What is a territory map?

Franchise territory mapping is defined by a territory map. This map is also referred to as a choropleth map and it specifies the boundaries of a certain geographical area for business operations. It may be based on postal codes, cities, districts within cities, states/provinces and even countries. In franchising, it’s important that each carefully delineated map contains similar characteristics of the target market such as income levels, age and gender, socio-economic status and others.

 

How do franchise territories get mapped?

Franchise territories can be based on several factors. Although their primary defining characteristics are geographical, there are many elements that are taken into account. One factor is the terrain (is it mountainous or flat, are there rivers or fields). Another is whether there are any physical characteristics or barriers that can prevent a franchise from operating effectively (such as train tracks which separate the same location). Further factors to consider are the size of the population, the demographic characteristics of the population, income and education levels, age and gender, etc. As such, franchise territories can get mapped either on a physical map by shading out certain areas that contain either physical or imaginary boundaries or through the use of franchise territory mapping software.

 

Why is creating a franchise territory important?

There are several reasons why it’s important to have a territory map. By defining the area of business operations for each of your franchisees, you will be better able to determine and project the sales and revenue potential for each area. This, in turn, means that you will be better able to reach the right customers, achieve your financial targets, be able to promote your franchise offering to other prospective franchisees and generally enjoy greater growth over the long term.

 

How do you develop a franchise territory map?

A franchise territory map should be developed with the following factors and elements in mind:

  • Define your objectives and think long term
  • Balance business development and retaining loyal customers
  • Segment your market and identify your target market/ideal customer persona
  • Identify territories that offer the highest potential
  • Know each territory’s worth and avoid underselling a territory that could end up being highly lucrative
  • Base your decisions on real and actionable data
  • Determine which criteria you will use to draw up your maps (administrative mapping, custom mapping or a hybrid approach)
  • Ensure that territories selected are comparable with each other and that you’re offering franchisees an equitable portion 
  • Attempt to ensure that neighbouring franchisees don’t cannibalise each other’s business
  • Use highly targeted marketing strategies to reach the right customers in an area and not the entire territory
  • Be sure to use the right tools to meet your expectations and goals – this can be manually working on a map or using more sophisticated mapping software.

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