Key takeaways
- Geographic data helps franchises understand market demographics
- Determine the right location depending on proximity to business or residential areas
- Â Data assists in identifying competitors and analyzing complementary businesses
- Geographic insights link franchise performance to customer density and spending habits.
Geographic data helps determine pricing strategies and product offerings based on local affordability. High-income areas support premium services, while budget-friendly options perform better in lower-income zones. Geographic data factors in considerations such as unemployment rates and economic growth to ensure long-term franchising viability. It also helps franchisees navigate legal restrictions that could impact operations.
It can identify areas with sufficient foot traffic or a growing customer base and help franchises avoid oversaturation in slow-growth regions.
Geographic data can also reveal regional preferences that influence customer demand. For instance, health-conscious areas are likely to favor organic food franchises.
Competition analysis
Its most advantageous role is probably in identifying competitor density. Taking over a franchise in an area with too many similar businesses doesn’t make much sense. Instead, franchisees should target underserved or emerging neighborhoods. What’s more, analysis of complementary companies is instrumental.
For example, gyms near healthy food chains can boost customer traffic. On that note, one of the best franchises to own in Texas is Anytime Fitness, a leading fitness franchise that provides 24/7 gym access to members. The brand’s flexible model caters to various community needs. The initial investment ranges from $381,575 to $783,897, with a franchise fee of $42,500. Franchisees receive extensive training, marketing support, and access to a proven business model.
Another potentially lucrative Texas franchise to own is Five Star Bath Solutions, which specializes in bathroom renovations and offers high-quality services. The initial investment ranges from $91,000 to $140,000, including a franchise fee of $30,000. Franchisees receive comprehensive training, marketing support, and ongoing operational assistance.
Choosing the right site
Geographic data provides details that can help with gauging location selection and viability, taking into account the proximity to business hubs or residential areas. A franchise of coffee shops located near office areas may ensure convenience for target customers.Potential franchisers or franchisees should also consider traffic and commuter patterns and real estate and leasing trends.
The data mapping tools provide serves as the basis of an analysis of roadways, foot traffic, and public transportation to determine high-exposure sites. It can help franchises find affordable locations with long-term sustainability and avoid high-rent areas, which eat into profit margins.
Finally, location intelligence can offer insight into customer behavior and buying patterns. Geographic insight helps identify where customers are most active and connect store performance to customer density and spending habits.
The prospects of franchising nationwide in 2025
The latest International Franchise Association report shows that franchise growth exceeded predictions for 2024, even considering policy headwinds and ongoing economic uncertainty. Franchises grew by 2.2% in 2024, which exceeded the predicted 1.9%. What’s more, the report forecasts that franchises will gain another 2.4% in 2025, which surpasses the 1.9% projected by the Congressional Budget Office for the broader economy.
Growth in southwestern and southeastern states will outperform the remaining franchise market in 2025, fueled by a lower cost of living and business-friendly policies. Output will grow by 8.5% resp. 6.2% in those states. As you can see, the biggest growth is expected in the area of Texas.
The number of franchise establishments will reach 851,000 total units across the country, increasing by 2.5% or over 20,000 units. In 2024, franchising employment increased by 2.2%, adding almost 200,000 jobs. Around 210,000 new jobs are expected this year, growing at a rate of 2.4%. Total franchise output is projected to increase by 4.4%, exceeding $936.4 billion, up from $896.9 billion last year. The total franchise GDP will rise by 5% to $578 billion. Personal services are expected to be the fastest-growing industry in 2025, adding 4.3%.
Recap
- Â Â Â Competitive analysis
- Â Â Â Choosing the right site
- Â Â Â The prospects of franchising in 2025
