Location Allocation Optimization is a spatial analysis technique that identifies the best placement of facilities to efficiently serve distributed demand. In franchising, the “facilities” are franchise units and the “demand” reflects customer populations or commercial activity. The model evaluates which location or set of locations will maximize market access while minimizing travel distance and operational cost.
This approach is especially valuable in systems where proximity and convenience strongly influence revenue performance.
Franchise expansion requires disciplined evaluation of where new units should open. This method allows franchisors to:
• Prioritize markets where supply and demand alignment is strongest
• Reduce cannibalization between franchisees operating in neighboring areas
• Improve accessibility to target customers relative to drive time or distance
• Support Item Nineteen projections with rigorously derived assumptions
• Build scalable networks that preserve economic viability for existing owners
It is an analytical foundation for sustainable growth rather than speculative placement.
The model begins with:
• A set of candidate locations (potential franchise sites)
• A measurable demand dataset such as households, revenues or leads
• A travel cost metric such as distance or drive time
• Constraints such as maximum travel range or minimum market coverage
Algorithms then calculate the configuration that yields the best performance under selected criteria. For example, a franchisor may ask:
• Where should the first three units go in a new state
• How should new units fill demand gaps between existing locations
• What is the optimal distance between stores to maintain profitability
The output is a ranked evaluation of the best sites for initial or continuing expansion.
• National or regional rollout where site sequencing impacts overall growth
• Urban markets where oversaturation risk is high
• Rural markets where service gaps must be minimized
• Conversion strategies involving acquisition of local operators
• Growth planning driven by private equity performance targets
By quantifying the impact of each new location, franchisors can justify expansion decisions to stakeholders and lenders.
Territory boundaries and unit placement decisions should remain consistent with Item 12 disclosures and executed Franchise Agreements. When optimized site placement requires shifting boundaries or redefining market strategies, franchisors should:
• Maintain formal governance policies for territory changes
• Provide transparency to existing franchisees impacted by adjustments
• Document rationale supporting fairness and performance equity
Location Allocation Optimization does not replace contractual rights, but it strengthens the business justification behind strategy adjustments.
Zors provides franchisors with the ability to evaluate candidate markets visually against demographic opportunity and projected market access. The system’s single structure enables:
• Side by side comparison of awarded territories and undeveloped opportunity
• Categorization of territories to differentiate between operational and rights based zones
• Collaboration between legal, development and operations teams in one mapping environment
• Realistic scenario planning before presenting final franchise offerings
This allows franchisors to coordinate expansion across compliance, performance and brand growth objectives with a shared spatial framework.
Drive Time Map
Isochrone
Isochrone Surface Modeling
Voronoi Partitioning
Franchise Territory
Catchment Modeling
Kernel Density Estimation
Lead to Territory Assignment
Franchise Territory Mapping
Contact Mapping
Point of Interest Mapping
Last updated: December 4, 2025
