Careful and successful territory planning is the cornerstone of franchising success. In fact, not only the franchisors, but also the franchisees depend on expert planning. Since franchisors and franchisees depend on one another in business terms so much (which is pretty rare in the business world if you think about it), it’s essential not to mismanage territory mapping.
Oftentimes, franchisors act as the industry that they operate in dictates them:
- they don’t plan for the long run
- they chase short term gains instead of investing into the future
- they map territories as they see fit (without any analysis or data to back up their decisions)
Other times, territory mapping is neglected altogether or left to chance. As you result, you get territories that are:
- Too large – this technically means that instead of having, for instance, 10 fully operating and successful territories, you get 5-7 due to poor planning and mapping. This destroys your chances of growing your franchise business further and on top of that, results in a considerable loss of profits.
- To small – While this tactic may benefit you as the franchisor at a first glance, it will ultimately results in “territory wars” between your franchisees. They will start fighting over consumers in their respective territories, which will hurt their bottom line, and ultimately lead to system failures, negative publicity for your franchise and loss of operating franchises.
- Non-defined territories – this is by far the worst case scenario, which is sadly fairly common in the industry. Non-defined territories are basically dictated by the franchisees’ buying demands — you sell the franchise to as many franchisees as possible. The bad part is that you technically put your whole business on a time bomb, which will explode when eventually all franchisees lose their business due to territorial wars and no regulations from your side.
You don’t see it coming
The problem with lack of mapping is that once a franchisor stars selling franchises to franchisees, the devastating results of poor territory planning don’t come into play right away.
Even with no planning and zero thinking behind mapping your territories correctly, the first few times that you sell your franchise, they are almost surely going to be profitable.
The problem starts growing tall as you progress and increase the number of franchises you sell.
As the number of your franchises grows, you start running out of options due to poor planning, which can potently results in millions of lost profits for your business, or even bankruptcy in some cases.
Benefits that mapping software brings to franchises
Many franchisors skip (or mishandle) territory planning and mapping mainly to the large costs associated with data collection, finding the resources needed, time used to map, etc. To help combat those problems, franchisors are highly advised to consider using a territory mapping software for planning and mapping purposes.
The whole business world utilizes the power of modern software heavily in their everyday business operations to great success: why should franchising be any different?
Mapping software wields a number of benefits in addition to correct planning. Let’s explore them together:
1. Create ideally sized and profitable territories – creating ideally sized territories that are equally profitable has a number of benefits:
- You won’t have to worry about the future – the “time bomb” problem will not become an issue
- There will be no problems with or among your franchisees – no territory wars anywhere
- The ideal size of each territory lets you take advantage of every bit of land available in a way that will help serve all the population of the given area, without missing any opportunities – you won’t lose any potential customers
Based on the data about your consumers, their demographics, competition, population density and all the other business and industry related information, a territory mapping software can lay everything right before your eyes – clean, clear and simple.
2. Provide equal opportunities to franchisees – since all the territories will be equal in terms of value and quality, franchisees will feel more at ease knowing that each of them has equal opportunities to grow the business and that no one will be stepping into another’s territory to claim profits.
3. Import existing territories for future planning – A territory mapping software is not only useful to franchisors that want to start from scratch, but can also help plan and map territories for future. So if you have invested the necessary time into correct mapping before, your data and hard work will not go to waste – just plug it in with the rest of the info and let the software do its magic.
4. No GIS degree needed – The beautiful part of using technology is that you don’t need GIS degree to make use of it: just plug the data into the system, and you will get almost instantaneous results of the best possible ways to map your territories. Obviously, the more data you have, the better planning you can do.
5. Tweak your territories fast if your data changes – The consumer and competitor data that you collect isn’t made of solid rock. A lot of that data changes from time to time (population growth, competition growth, consumer behavior changes, etc.) and you need to keep up with those changes if you really want to succeed. Software will help save lots of time and effort when you actually need to reconsider your territories.
6. Map territories by the geography that you wish – Different franchisors prefer different geographical ways of mapping their territories. Whether you want to go with zip codes, counties, states, provinces, geographical borders, physical boundaries or DMAs, the software will help you perform each task separately, and later you can compare and choose the best way to go with.
7. Export the data and map to PDF – after you are done with mapping and planning, you can export that data to a variety of formats (the most comfortable of them being PDF) to easily access it later, or share with all the franchisees.
8. Ensure legal consistency across your franchise –probably the last thing you want to happen, is have legal problems inside your franchise system. Incorrect mapping and poor planning can result in contract violations with and among your franchisees, which will lead to some pretty nasty problems. Software can prevent that and help ensure that everything will go according to contracts inside your franchise.
9. Appear more professional to potential franchisees – Last but not least, using technology and software will add authority points to you as a franchisor. Since franchisors and franchisees are so dependent on one another, it’s in their best interest to pick a good partner for themselves. Smart franchisees will see and realize the opportunity in working with a franchisor who leverages technology in their business as opposed to those who not. After all, the success of your franchise depends heavily on the franchisee you work with, so attracting the best ones around is a pretty neat bonus.
Making use of territory mapping software might seem costly at first, but if you are planning to be in the business for a long time and take a deeper look at all the benefits you receive, it all becomes crystal clear.
Territory mapping software is specifically designed to help franchises deliver better services, increase their profits, create better partnerships, save money in the long run and grow their business correctly: so why not take this incredible opportunity?