Oct 7, 2025
Comprehensive guide to creating and managing franchise territories in Population Explorer with demographic insights and compliance tips.
How to Create a Franchise Territory Map (Step by Step)
Purpose (who this is for)
Franchisors, development teams, and brokers who need a reliable, repeatable way to define fair, defensible franchise territories that align to legal disclosures (FDD Item 12), minimize cannibalization, and scale with growth.
TL;DR
A sound franchise territory is more than lines on a map‚ it's a legally disclosed promise (FDD Item 12) and an operational model. Define territories with market-fit geographies (ZIPs, municipalities, or drive-time isochrones), size them with population and income thresholds, and revisit them as demographics shift to avoid encroachment and performance gaps.
Background: what a 'territory' means in franchising
FDD Item 12 (Territory) requires franchisors to disclose whether a franchisee receives a protected territory, how it's determined, and any rights the franchisor reserves within it (including online sales and relocation conditions). This is mandated by the FTC's Franchise Rule (16 CFR Part 436).
Exclusive vs. protected/non-exclusive: 'Exclusive' typically means no same-brand competition within the area; 'protected' can be narrower (certain protections without full exclusivity). Clarity reduces encroachment disputes.
IFA guidance emphasizes that candidates should understand whether a territory is protected, how close another unit could open, and how internet sales are treated—so your definition should address these explicitly.
Common ways to define territories (and when to use each)
ZIP code or postal code bundles → Easy to administer and align well to sales ops; watch for uneven market potential across ZIPs.
Municipal/county boundaries → Clear governance lines; can be too coarse in dense metros.
Radius buffers (e.g., 3 miles) → Simple and transparent, but ignore population and barriers; can under-/over-protect.
Drive-time isochrones → Reflect real customer travel behavior and trade areas; best for brick-and-mortar catchments.
Pro tip: Many brands start with ZIP bundles for clarity, then refine with drive-time analysis in dense or complex markets.
Sizing & balancing territories (fairness + performance)
Balance to objective thresholds such as total population, target demographics (e.g., HH income, age), and daytime population‚ so each operator has a comparable opportunity. GIS territory-design workflows are specifically built to add variables and balance territories across geographies.
Account for competition & cannibalization: define clear encroachment policies; analyze overlaps before approving new locations to protect unit economics.
Document assumptions in FDD Item 12: how boundaries are set (ZIPs vs. drive-time), what 'protected' means, and when/why the franchisor may adjust areas.
Data you should use every time
Population & density to normalize opportunity across territories.
Income & key demographics that correlate with your concept’s demand.
POIs/competitors to understand catchment quality and overlap risk.
Mobility/drive-time for real trade-area reach. (Leading GIS docs explicitly support creating drive-time areas and enriching them with demographics for trade-area analysis.)
Governance: avoiding encroachment and disputes
Be explicit about rights of first refusal, relocation, and online/direct sales carve-outs in Item 12 to reduce ambiguity.
Maintain a territory change log and revisit boundaries when population shifts or when new data materially changes opportunity.
Use exact, machine-readable definitions (lists of ZIPs or stored polygon IDs) to prevent 'fuzzy' borders and overlapping claims.
How to do it in Population Explorer
Population Explorer lets you design, test, and refine franchise territories using live demographic and income data. Each boundary you create, whether a hand-drawn shape, travel-time isochrone, or radius buffer, behaves like a normal polygon in the app, with population, area, and density metrics shown instantly.
Do you already have territory boundaries in mind?
If you already have polygons (ZIP bundles, municipal shapes, or existing franchise boundaries), you can import them directly:
Open the File → Import Shapes menu.
Upload your .KML or .KMZ file.
Each shape will appear in the folder tree under its file name.
Large or complex KMLs may take longer to process; the app will warn if a file is too complex to process.
Once imported, you can rename, color-code, or move each shape into a logical Franchise Territories folder.
Select a polygon to view its population, area (km²), and density (people/km²) metrics.
Use Export → Excel to see these results in tabular form for comparison.
Creating a new franchise territory
To start from scratch:
In the left panel, open or create a folder (territories must live inside folders).
Select New → Create Item to open the creation menu.
Choose one of the available geometry types below.
Enter a Name, pick a Color, and click Add to save.
Custom-drawn franchise territory boundaries
Use this when you want to sketch exact territory lines.
Choose Custom Drawn Shape from the Create Item menu.
Click on the map to start drawing; each click adds a vertex.
Close the polygon by clicking the starting point.
Enter a Name and Color, then click Add.
Your shape appears in the selected folder; you can edit (pencil icon), rename, or zoom to region as needed.
Travel-time franchise territory boundaries
Best for defining realistic service areas around a store or candidate site.
Choose Isochrone from the Create Item menu.
Click a point on the map (or enter coordinates).
Set:
Transport mode: Driving, Driving + Traffic, Cycling, or Walking
Travel time: Up to 60 minutes
Color for visual distinction
Click Add to generate the travel-time polygon.
To move the centroid later, delete and regenerate — isochrones don’t move dynamically.
Fixed-radius franchise territory boundaries
For simple, evenly sized catchments (e.g., 3-mile or 5-km buffers).
Choose Buffered Point from the Create Item menu.
Click on the map or enter latitude/longitude.
Input:
Buffer radius (km)
Name and Color
Click Add to create the circular boundary.
Adding points of interest
You can include competitor or landmark points to understand overlap and drive-time access.
Choose Marker Point from the Create Item menu.
Click on the map or enter coordinates.
Input Name, Color, and optional Description.
Click Add; the marker will appear in your folder.
To bulk-import sites, go to File → Import → Markers and upload a .CSV or .XLSX file with columns: Name, Latitude, Longitude, Description.
Exporting your results
When your territories are complete:
Select the folder that holds all territory polygons.
Choose Export → Excel to download:
Dissolved Folder Tab (unioned totals)
Child Tabs (individual territory metrics)
Or select Export → KML/KMZ to share map files with others.
Each export includes:
Population, Area, Density, and ASB (age/sex breakdown)
ISO-formatted data for integration into other GIS or CRM systems.
Verification
After export, open the Excel file and confirm that:
Each territory name matches your folder list
Population and area fields are populated
Density and demographic tables appear under each tab
You can now reference these results in your FDD Item 12 disclosure or use them to rebalance territories based on live population and income data.
Frequently Asked Questions
Q: What is a protected franchise territory?
A: A protected franchise territory is an area where the franchisor agrees not to open another same-brand unit or allow another franchisee to operate. The exact rights vary by brand, but the disclosure must be clearly described in Item 12 of the Franchise Disclosure Document (FDD).
Q: How are territories disclosed in the FDD?
A: Franchisors are required under the FTC Franchise Rule to explain how territories are determined, whether they are exclusive or protected, and what rights the franchisor reserves (such as online sales or relocation). This information appears in Item 12 of the FDD.
Q: What’s the difference between exclusive and protected territories?
A: Exclusive territories prevent the franchisor from opening any same-brand units within the area. Protected territories provide some restrictions but may allow additional units or certain franchisor rights. Clarity reduces disputes and should be carefully reviewed in the FDD.
Q: Why is population data important in franchise territory mapping?
A: Population and demographic data ensure that each territory offers comparable business potential. By balancing territories with live data (e.g., population, income, daytime traffic), franchisors can create fair opportunities and minimize performance gaps or encroachment risks.
