Sell More Franchises Using Customer Analytics

Sell More Franchises Using Customer Analytics



Welcome to the franchisors’ paradox: overly aggressive growth has killed many brands, yet franchise businesses are growing faster and creating more jobs than the rest of the economy.

In a market where the old adage “if you build it, they will come” is far from reality, how do you maximize franchise territory development, maintain a brand- wide personality and decide whether to adjust for regional preferences?

Entering new markets or infilling current markets require a careful understanding of customer segments, regional preferences and site locations. Furthermore, revenue forecasts for a proposed site, irrespective of the brand or concept, should be part of any business plan for franchisors.

These insights are absolutely essential given the fact that a franchisor’s success is greatly tied to where new sites are opened, which in turn impacts positive word of mouth and the pace  at  which new franchisees reach and exceed the break-even threshold.

With that in mind, it would only make sense to assess the viability and revenue potential of a prospective location before time, effort and capital are expended. So why don’t more franchisors use customer analytics and revenue forecasts for their franchisees to differentiate themselves from the competition and set proper expectations for their customers?

As a franchisor, you obviously have a vested interest in helping your franchisees succeed and want to capitalize on the sector’s continued boom – so it’s critical that you make sure you’re taking the right steps to thrive in the current retail environment while laying the foundation for future growth.

With a constantly changing retail landscape and shifting consumer preferences, however, it’s hard to determine what to focus on in order to grow your franchise and make it flourish in markets across the country. But, sometimes in order to grow fast, it pays to slow down so you can identify and understand what matters most. Because while starting or expanding a business is a natural desire for many, finding the right formula in today’s market is no easy feat.

So, if you’re a franchisor looking to optimize your expansion efforts, the following checklist outlines four key strategies that play a significant part in ensuring growth and determining the success of your growth plans.


From the industry’s most prolific to the single-shop outfit looking to launch its second location, franchisors understand their home market better than anyone. They know the customers they want to reach and can effectively operate within their respective “backyards.”

But, do they know the next town over? Or the next state over? How about the next time zone? The answers come with decreasing confidence.
Wherever your stores may be, it’s critical that you understand who your local customers really are – since even in a single city, the demographics and psychographics of the customers can vary greatly.

This means that in order to take swift and decisive action regarding growth, franchisor leadership needs objective and quantifiable data. This data provides franchisors with the foundational knowledge needed to lead successful market expansion and meaningfully manage the expectations of their franchisees and customers across the country.

Furthermore, once you know your customer mix across markets and trade areas, you can selectively choose the most effective media for your marketing messages to be funneled through, optimize product mixes and identify the total number of locations each market across the country can support.


While the majority of franchisors will agree that the perception of their brand differs from city to city and market to market, most have a thin grasp on this concept.

A franchisor may know that they sell more BLT sandwiches in Albuquerque than in Richmond – but why? Could it be that sales of BLTs at the Virginia location outperform all other menu items and it’s the most popular BLT on the east coast, but the consumers in New Mexico happen to eat them more often? Without a way to compare the New Mexico customer base to the Virginia customer base in a region-to-region study, it’s impossible to know for certain.

Some of these answers come solely from being in the markets and getting the pulse of the customers
– BUT, data can drive this awareness, too.

There are a number of data sets that will give franchisors the insight necessary to better tailor their offerings from region to region, whether that’s menu items, sales and couponing, or marketing campaigns, without setting foot in the market.

While it’s never wise to abandon franchisee visits, time efficiency can be maximized with a business solution in place that incorporates data to level-set the customer bases.


One of the most frustrating realities is knowing that your concept is ready for penetration into a particular market, but that the customer base in the market is not yet ready to support it or to support multiple locations.

The patience required from both franchisee and franchisor to establish multiple locations in a market requires a teamwork approach applied through an understanding of customer growth and timing, as well as aggregated data projections – national data combined with individual store transaction data – to help drive that insight.

Data-driven solutions offer analyses without bias so that franchise leadership can make more strategic, yet objective, decisions across the board by leveraging a universal foundation that’s rooted in understanding customer data – regardless if the customer lives in small-town USA or metropolitan Canada.


As you know, it’s a competitive market for franchisees. And not just for their industry-specific operations, but also with internal corporate competition for resources and attention.

Franchisees know that they have a higher likelihood of failing if they are poorly managed and neglected by their franchisor – which is not only bad for the franchisee, but also for the overall brand in a market.

That’s why it’s vital for franchisor leadership to take a hard, close look at the way they determine both corporate territories and franchisee regions to minimize cannibalization.

In order to do this, corporate franchise leadership needs to make objective, data-driven decisions when it comes to franchise territory determination.

Franchise territories should be granted only after an in-depth, multi- dimensional analysis has been conducted to make sure that the tiger that is each franchisee doesn’t eat its young – because at the end of the day, it’s too risky to assume that each franchisee will objectively assess and operate within his or her market’s trade areas.

But beyond combating cannibalization and managing territories, it’s vital that franchisors know who their customers are, so they can determine market optimization and not have to face the dangers of underserving a particular trade area.

Brand ownership needs to have a solution designed not only to identify today’s customers, but also tomorrow’s and 2015’s customers
– because customers are the lifeblood of every business concept. Franchisors who truly know their customers and who understand their lifestyles and behavior patterns have a distinct advantage over those who don’t.


In a crowded, competitive environment, it’s more important than ever for franchisors, both  large and small, to have a keen understanding of their customers and a precise definition of their market position in order to stand out from the crowd.

Customer analytic insights are essential for franchisors, as these insights make it possible to develop a customized profile that identifies your best customers, discover where they live and find other potential customers like them.

Utilizing that customer profile in a predictive model will allow for targeted expansion by pinpointing trade areas with significant clusters of your core customers.
This model shows you exactly how many core customers live in a specific trade area in a specific market and quantifies the value of each customer in terms of dollars and visits.

By predicting what each  household  will  be worth to each store or restaurant, the model can accurately forecast the top-line revenue that the location will generate – which allows franchisors to quickly analyze the quality of any location under consideration.

This gives you a good idea of where to open a new franchise unit – and just as importantly, where not to open one.

But more than just identifying the top potential markets and site locations for a new franchise location, the franchise customer profile shows you how many franchises to sell in a territory and how to improve local marketing campaigns for franchisees.


Buxton gives franchisors the tools they need to truly define and locate their target audience while giving them the ability to make informed, data-driven decisions for site selection, marketing strategies and territory development. Help your franchisees start on the road to success by giving them the tools, information and attention they need.

Journey Awareness Persona C-Suite/Finance Franchise Sales