Protecting Catchments

Parallel with product and brand, territories comprise the largest value proposition of a franchise. Where you are selling your product is just as critical as what you sell, because population and demographics are quite widely dispersed throughout the globe. Some territories will be packed full of elderly women, for example, while others will have large numbers of university students. Read more thoughts here on how these demographic variations affect territory valuation. 

If territories are the largest value proposition of a new franchise, protected catchments are the largest insurance policy. Catchment protection guarantees that no other franchisee will compete for buyers in the protected area. 

No franchisee should ever buy a territory without some sort of protection clause. Neglecting this sort of provision has consequences on both sides of the transaction: franchisees are exposed to the harmful effects of cannibalization; franchisors lose the opportunity to maximize adjacent build-outs. 

Transparent, data-backed catchment strategies can produce mutually beneficial transactions for franchisors and franchisees alike. Here are three tips for negotiating protected catchments in your next territory sale: 

1. Consider travel-time boundaries: how long are buyers reasonably willing to travel for your goods or services? Will they travel on foot, bicycle or vehicle? 
2. Set population benchmarks: what is the average population count for comparable site catchment areas? 
3. Develop a master territory map: review potential sites in the context of a larger, regional territory strategy 

Interested in learning more? Our world-class GIS technicians provide on-demand territory management services for brands all over the globe. Reach out here for a free consultation!