Territory Rollout Planning

This use case explains how to plan territory rollout, unit openings and network growth for franchise networks in Model Reef.

You will:

• Represent current and future territories and units in the branch structure.

• Build drivers for new unit openings, ramp up and maturity curves.

• Connect territory rollout to unit P&Ls and franchisor royalty income.

• Use scenarios to compare alternative rollout and growth strategies.

Model Reef is not a GIS or site selection system. It models financial and timing impacts of rollout decisions, not site scoring or location analytics.

When to use this pattern

Use this pattern when:

• You are planning expansion into new regions or territories.

• You want to test different rollout speeds and formats.

• You need to quantify the impact of rollout on network revenue, cost and cash.

• You need a structured way to compare expansion scenarios.

It depends on:

• Franchisee Unit P&L Model

• Royalty and Fee Revenue Model

• Network Level Consolidated Reporting

Architecture overview

Territory rollout planning uses:

1. Territory and unit structure

   • Branches for territories, regions and units.

   • Flags or drivers for current versus future territories.

2. Opening profile and ramp up

   • Number of new units opened per period by territory.

   • Ramp up curves for volume and margin as units mature.

   • Unit closure or relocation assumptions where relevant.

3. Franchisor and franchisee economics

   • Unit level P&Ls for new stores.

   • Royalty and fee revenue for the franchisor.

   • One off fees and capex for openings.

4. Scenario analysis

   • Different rollout speeds, territories and formats.

   • Sensitivity to unit economics and success rates.

1

Map territories and units into the branch tree

Set up a branch structure such as:

• Network

  • Territory - Region A

    • Unit - Store 001

    • Unit - Store 002

  • Territory - Region B

    • Unit - Store 010 (planned)

    • Unit - Store 011 (planned)

Include planned units as branches even before they open. Use timing and enable/disable controls to represent when they become active.

If relevant, distinguish between:

• Company owned units.

• Franchisee owned units.

You can represent them in separate sub-branches or via categories and flags.

2

Create rollout and opening drivers

In the Data Library, define rollout drivers such as:

• Units Opened per Period by Territory.

• Earliest and latest opening dates for each planned unit.

• Probability or success rate of planned openings being executed.

You can use simple counts per period, or detailed lists of specific units with target opening dates.

These drivers will turn planned units into active revenue and cost generators when the model timeline passes their opening dates.

3

Apply ramp up curves for new units

New units rarely perform at steady state from day one. For each unit or unit pattern, define:

• Ramp Up Period (for example 6, 12 or 24 months).

• Ramp Up Curve as a percentage of mature sales and margin per period.

• Stabilised or mature performance levels.

Implement this by:

• Defining a Ramp Factor series per unit or unit cohort.

• Multiplying mature revenue and cost levels by Ramp Factor in early periods.

You can represent cohorts of similar units instead of each unit individually, particularly when planning larger rollouts.

4

Connect rollout to franchisee and franchisor economics

Using the Franchisee Unit P&L Model, each new unit will:

• Generate its own revenue and cost profile as it ramps.

• Contribute to territory and network P&L.

Using the Royalty and Fee Revenue Model, those same units will:

• Generate royalty and fee income for the franchisor.

• Contribute to marketing levies and service fees.

• Trigger initial franchise fees at opening.

Ensure that:

• New units reference the same driver sets as existing representative units, adjusted for local differences where needed.

• One off fees are tied to the opening schedule.

• Capex and fit out cost are captured in Asset and Cashflow variables at opening.

5

Model capex, funding and working capital impacts

For each new unit or cohort, create Asset and Cashflow variables for:

• Fit out and equipment capex.

• Initial inventory or stock where relevant.

• Pre opening marketing.

Set timing so that:

• Capex occurs in the build period prior to opening.

• Funding assumptions (debt, equity or franchisee funding) are represented correctly.

• Any franchisor contributions or incentives are visible.

This allows you to see how rollout plans affect the network’s cash position and funding needs.

6

Use scenarios for alternative rollout strategies

Clone the base model into scenario models to test different rollout plans, for example:

• Faster versus slower rollout.

• Different territory order and sequencing.

• Larger format units versus smaller format or kiosk units.

• Company led versus franchisee led expansion.

• Different ramp up assumptions and success rates.

In each scenario, adjust:

• Units opened per period and per territory.

• Ramp up curves and mature unit assumptions.

• Capex and funding settings.

• Royalty and fee structures for new cohorts of franchisees.

Compare scenarios using:

• Network revenue and margin growth over time.

• Cashflow, funding requirements and headroom.

• Payback and valuation metrics.

• Sensitivity to unit economics and ramp up patterns.

Check your work

• Planned unit openings and timing align with your commercial plans.

• Ramp up and mature unit performance assumptions are grounded in historical performance and realistic expectations.

• Capex and working capital assumptions reflect actual experience.

• Scenario comparisons help decide which rollout paths are acceptable and which are too risky.

Troubleshooting

Rollout plans produce unrealistic growth curves

Recalibrate ramp up curves and success rates and ensure that capacity and market size are considered in your volume drivers.

Cash requirements are higher than expected

Check timing of capex, franchise fees and royalties and confirm whether you have assumed franchisor funding where franchisees would typically fund their own fit out and working capital.

Model becomes complex with many planned units

Group units into cohorts by type and location instead of modelling every unit individually, especially beyond the near term horizon.

Related guides

• Scenarios & Planning

• Convert a PDF to a Structured Forecast

• Naming (Variables)

• Editing Frequency