How the LocIQ Score Works — and What We Don't Publish

The LocIQ Score is a 0-100 number built from four measured components — demographics, foot traffic, accessibility and market saturation — combined using weights that differ by business type. The number itself is calculated by fixed code from measured inputs, not written by a model; the narrative in the report explains the number, it never sets it. The same inputs always produce the same score, and every report records the version of the formula it was scored under, so an old report stays reproducible after the formula changes.

Below is what each component measures, why the same address scores differently for different businesses, and — the part most methodology pages skip — exactly which parts of the method are not published, and why.

What the four components measure

These definitions are taken verbatim from the glossary printed in every report, so what you read here is what your report will say:

Demographics. Reflects how well the population living and working near this address matches what this business type typically needs to succeed — income levels, population density, and age distribution weighted toward the customer profile this business type serves. This measures the surrounding population's fit for the business, not the location's overall popularity or activity level.

Foot Traffic. Estimates how much general commercial activity and movement the surrounding area sees throughout the week — how busy the immediate area tends to be. This reflects overall area activity, not a guarantee of customers for this specific business; a busy area still requires the business to attract and convert its own visitors.

Accessibility. Measures how easily customers can reach this location — on foot, by bike, by public transit, and by car. A higher score means fewer barriers to arrival across the ways customers might realistically travel to the business.

Market Saturation. Reflects how many similar businesses already operate near this location. Unlike the other three scores, a lower saturation score is generally more favorable — it means less existing competition nearby. A higher score means the immediate area already has significant competition in this specific category.

Each component is scored on its own and all four are shown alongside the composite, so you can see which one is carrying the result. A strong overall score resting entirely on one component is a different proposition from a strong score resting on four, and the breakdown is there so you can tell them apart.

Market saturation runs the opposite way to the other three

A high market saturation score means MORE competing businesses of your type nearby, which is worse. A low one means fewer, which is better. Demographics, foot traffic and accessibility all read the ordinary way, where higher is better. Saturation is the one exception, and it is the single most misread number in the report.

So a saturation score of 80 is a warning, not a compliment, and a saturation score of 15 is a good result. We put that conclusion on the page rather than leaving you to apply the rule: in the report the saturation number is printed next to a plain-English reading of it — crowded, heavily saturated, little competition — and its bar is drawn by how favourable the result is rather than by the raw number, so a good outcome always looks like a good outcome next to the other three.

Whether crowding is actually bad depends on the business, and the report reads it in context. Some categories cluster for a reason, and a corridor full of peers is evidence of real demand. Others split a fixed local market, where every additional competitor is a direct subtraction. The score measures the density; the analysis around it says which of those two situations you are looking at.

Why the same address scores differently for different businesses

The four components are the same for every business type. How much each one counts is not. A coffee shop and a laundromat scored at the identical address will not get the identical number, and that is the method working rather than a contradiction in it.

A coffee shop lives or dies on people passing the door: impulse trade, a morning peak, a customer who was already walking by. Movement past the storefront matters enormously to it, and the residential mix a mile out matters much less. A laundromat is close to the inverse. Almost nobody walks past and impulse-buys a wash; it depends on how many households live within a short trip, whether those households are renters without machines of their own, and whether a customer can get a full basket from a parking space to the door. Weighting both businesses identically would flatter the wrong locations for both of them.

So each business type carries its own weighting, set in advance from how that category actually draws its customers, and your report is scored against the weighting for the business type you selected. The weights themselves are not published — see the next section.

Is this a black box?

Partly, and it is worth being exact about which part. What the score measures is on this page in full: four components, what each one is looking for, which direction each one runs, and the fact that the weighting varies by business type. What is not published is the rest of the recipe — which source feeds which component, the exact weight each component carries for each business type, and the thresholds that turn a raw measurement into a 0-100 number. (Several of the underlying providers are named in the footer of every page on this site; what stays private is how they are combined.) That is the part that took the work, and it is the part being sold. We would rather write that plainly than bury it in reassurance.

The comparison that fits is a credit score, or a university ranking. Anyone can tell you a credit score is built from payment history, amounts owed and length of credit history, and that a ranking weighs things like class sizes and graduation rates. Nobody publishes the coefficients. The category of thing being measured is public, because you need it to interpret the number at all; the exact formula stays private, because it is the product. This page is the first half of that, in full.

What that means for you as a buyer, stated straight. You can check whether the four things we score are the four that matter for your business, before you pay. You can read every conclusion in the report against the reasoning printed next to it, and any figure derived from the lease numbers you entered is shown with its arithmetic. What you cannot do is rebuild the score from first principles and audit the formula line by line. If that is a requirement for your decision, this is not the right product for you, and that is better said here than after you have bought it.

Two things we will not do behind that privacy. The report does not invent a figure to fill a gap: where a signal is unavailable, or where no defensible benchmark exists for your category, it says so instead of estimating. And the score is never adjusted after the fact to suit a nicer story — the number comes out of the formula, and the write-up explains whatever number that was.

What the report is, and what it is not

A LocIQ report is provided for informational purposes only. It is a scored analysis of the data available at the time it is generated, and it does not constitute business, financial, legal or professional advice. A score, a verdict, or any other content in a report is not a guarantee, prediction or warranty of business success, profitability or outcome at any location. A well-scored location can fail, and a poorly-scored one can work. You remain responsible for independently verifying the information in a report and for the decisions you make in reliance on it, including whether to sign a lease.

What it is for is narrower, and more useful, than a verdict: a second, structured opinion on a location you are already considering, delivered before you sign, that tells you which specific things about the address deserve another look. That is why the report closes with a due-diligence list. If you would rather see that than read about it, a real anonymized report is published in full — the same three sections, the same scores, the same sentences a customer received. Do the ground work as well — walk the block at the hours you would actually be open, count what is already trading nearby, and call your city or county planning office about permitted use before you commit to anything.

And if what you need first is the lease rather than the location — what occupancy cost includes, what share of revenue rent should be for your category — that lives in our guides, free, and sourced separately from the scoring.