Taking your franchise to new destinations

Not all countries have a postcode system like the UK, so territory mapping is one of the easiest ways to build up a profile of the nation you wish to expand into

If you are running a successful and profitable franchise operation, there may come a time when you consider setting up a similar operation in another country. However, while you may think the methodology used to create your existing territories can be simply transferred to the new country, this may not be possible.

For instance, say you are based in the UK, where your territories are based on a solid Postcode infrastructure and you want to develop territories in the Republic of Ireland, you will quickly find that no such Postcode system exists. Equally the profile and needs of your customers in one country will probably be slightly different in another.

How should you approach your franchise expansion?

First you will need to conduct some research into that country – either yourself or using a third party such as UKTI (UK Trade and Investment).

Potential customer knowledge will be crucial, as will an insight into how the local economy is holding up in these difficult times.

An understanding of your likely competitors and how they are performing will give you a good steer and you should also take account of any legalities or restrictions that could slow or even prevent your expansion plans.

Then there are the logistics to consider – the road infrastructure and journey times if you need to deliver goods or visit potential customers, and how easy it will be for your customers to obtain your product or service.

Which brings us to the geography and how that can best be carved up into territories using available cartographic and postal boundaries.

As I have already mentioned the Republic of Ireland, I will outline the challenges that exist in terms of the postal geography, or rather lack of it. First, as mentioned there are no postcodes to speak of, except around Dublin.

Elsewhere, the postal service tends to follow what are termed ‘townlands’. A townland or bally (Irish: Baile Fearainn) is a small geographical division of land used in the Republic of Ireland and is of Gaelic origin.

There are currently circa 61,402 named townlands covering the whole country, far too many to use when designing territories. This is especially the case when compared to the UK, where we have circa 10,000 postcode sectors (PE1 2) or circa 3,000 postcode Districts (PE1).

So, how does one tackle territory design in the Republic of Ireland?

Well, there is a level of geography called a District Electoral Division (DED) which comprise circa 3,440 units (municipalities), and these make an ideal territory ‘building block’ level – especially when balancing sales potential across territories using data such as population or likely purchasing power.

In the map example above, a territory ‘Killarney’, in County Kerry in the South West country, has been created by Tech4T using the population counts associated to each DED to develop territories of equal sales opportunity. This map has also been ‘heat-mapped’ to show population density, again by DED.

Whichever country you are considering expanding into, it requires careful thought and, if territories are part of your franchise model, then take care to use the right postal or alternate geography in your territory design.

Written by Graham Barlow, Managing Director of Tech4T