The majority of franchise businesses operate on the basis of territories. This is a successful model to use, as in theory it ring-fences a fertile market for a franchisee to develop his or her business, while avoiding market saturation. Therefore, for a franchise business, deciding how to establish your territories is one of the most important business decisions you can make.

It is the franchise industry’s worst kept secret that some territories perform better than others. The common reasons given for this are differences in performance among franchisees (some work harder, smarter or more competently than others), or the success (or lack) of the franchise business model itself. However, many franchise territories simply don’t do as well as others, regardless of how...