Overview

Population alone does not capture the full opportunity in a franchise territory. By incorporating income and Points of Interest (POI) data, franchisors can refine boundaries, align territories with target customers, and reduce overlap or missed opportunities—all while strengthening FDD Item 12 disclosures.

See also: Franchise Territory Mapping Software

Why income and POI data matter

Franchise concepts vary widely in the demographics they depend on. Household income often determines purchasing power, while POIs reveal competitive pressures and complementary businesses. Together, these data points help franchisors refine territories beyond raw population counts.

Key income variables to analyze

• Median household income - Useful for broad demand indicators.

• Aggregate household income - Captures total spending potential across the territory.

• Income brackets - Align with your concept‚Äôs core customers (e.g., $75k+ for premium fitness, $35‚Äì75k for QSR).

Using POIs for territory refinement

POIs show the context of a territory. Competitors signal saturation risk, anchors drive foot traffic, and complementary businesses enhance customer convenience. Mapping POIs allows franchisors to:

• Identify high-traffic clusters suitable for new units.

• Flag competitor encroachment in prospective areas.

• Align territories with anchors like malls, office parks, or universities.

• Validate trade areas by checking whether POIs align with target customer behavior.

Approaches to integrating income and POI data

• Layer demographic data (population + income) with POIs in a GIS tool or PopEx to visualize true opportunity.

• Use POIs as secondary criteria when balancing territories, ensuring comparable anchor strength and competition levels across units.

• Combine drive-time isochrones with income thresholds and POI density to refine borders in dense or irregular markets.

Workflow for income + POI balancing

1. Define your ideal target income range and anchor POIs.

2. Map existing and competitor POIs across candidate territories.

3. Overlay population and income data to confirm balance.

4. Adjust boundaries to equalize opportunity and minimize conflict.

5. Document assumptions and methods in Item 12 for compliance and consistency.

Step-by-Step in PopEx

1. Filter Territories by Income

In the left drawer, select a folder containing saved items or territories. Use the Filter function to display only territories that meet your household income threshold‚ for example, areas with median incomes above $70,000. This helps you focus your analysis on high-value markets.

2. Identify Points of Interest

Next, add or locate key POIs within the filtered territories. You can place markers manually on the map, search for POIs using the Search bar, or import marker files (CSV or XLSX). Typical POIs include competitor outlets, complementary businesses, or high-traffic venues.

3. Organize POIs into Folders

Save your points of interest into two folders: one labeled Competitors and the other labeled Allies. Keeping these groups separate allows you to analyze potential overlaps and synergies more easily.

4. Create Buffers Around Competitors and Allies

Use the Buffer tool to generate circular zones around selected POIs. For competitors, use buffers to identify exclusion zones—areas to avoid when planning new locations. For allies, use buffers to identify high-opportunity zones located near supportive businesses.

5. Visualize Results with the Heat Map

Turn on the Heat Map layer to display population hotspots. Cross-reference these with your competitor exclusion zones and ally buffers. This helps you visually confirm where high-income populations overlap with favorable proximity to allies and distance from competitors.

Verification

Review your final map to ensure that your balanced territories meet your target income levels and that your competitor and ally zones align with population density clusters. Adjust filters, POI groupings, or buffers as needed.

Frequently Asked Questions

Q: Why not just use population data alone?

A: Population provides volume but not quality of opportunity. Income and POIs add crucial context about spending power and competitive dynamics.

Q: What types of POIs should I focus on?

A: Prioritize competitors, anchors, and complementary businesses most relevant to your concept.

Q: How do I avoid double-counting opportunity when layering data?

A: Define clear weighting rules (e.g., population first, then income, then POIs) and apply them consistently across territories.

Q: Do I need to disclose POI usage in my FDD?

A: While Item 12 requires disclosure of how territories are determined, you typically summarize data types used (population, income, POIs) rather than listing every source.

Related resources

• Franchise Territory Mapping Software

• How to Create a Franchise Territory Map (Step by Step)