Opening a franchise can be a very appealing and less risky investment for individuals desiring to own their own business while avoiding the headaches of building a brand and establishing a strong reputation from the ground floor. Investing in a franchise can be even more appealing during times of recession or even a pandemic when many are experiencing a lot of uncertainty especially in their jobs due to the down turn in the economy.
The first step when considering a franchise is most generally to choose a great concept, but another factor that ranks just as high on the scale of determining the success of a franchisee is location. As you are weighing the pros and cons of the franchise concept to make the decision as to whether or not it is a good fit for you and your potential customers, location plays a huge role in this process. It’s important to know if the location where you desire to open your franchise has a need and can support the product or service you are offering.
A component of finding the perfect location for your franchise concept is to understand there are different types of setups and the two most common are traditional and non-traditional. Traditional setups or free standing units are ones where the use of the building is strictly for the purpose of the franchise. These locations generally have their own parking lots. Non-traditional setups are often referred to as satellite locations because they are not the main attraction in their location. Non-traditional setups are likely a smaller extension of a strip center, big box retail store like Walmart, Target, or Fleet Farm, university, hospital, or gas station/convenience store.
Main priority for a franchise or any business is to be profitable and to accomplish the goal as quickly as possible. To be profitable, your potential customers must know you exist. When searching for the right location, visibility is critical but it often comes with a hefty price tag and it must not be the only factor in consideration, as visibility alone will not produce profitability. Consider a successful franchise with a prime location that provides excellent visibility but lease expense and other overhead costs significantly outweigh the amount of profit generated by the franchise. The franchise in this scenario is destined for failure. Now consider another franchise with a location in a not so visible area of town and does not produce the level of sales volume of the franchise in the first scenario, but has a lower lease cost. The franchise in the second scenario can make more profit while lacking the visibility available to the first franchise.
So how do you find the right location for your franchise?
Use your knowledge and available resources to gather as much information about the area for your potential franchise space as possible. Find out the traffic count during the week and over the weekend. Determine if the location you desire is in proximity of a strong customer base such as an office park, airport, hospital, or major venue. Do a comparison of the other businesses in the area to see if they are a compliment to your franchise or a competitor. Consider the accessibility of your potential location. Will it be easy for your potential customers to get to you or will they have to make a special trip. Look at the demographics of the area to provide data on income, cost of living, quality of life, employment, and future growth projections. Lean on the experts in your upline (your franchisor) ask them if they provide support on site selection, lease negotiations and other major considerations that come with starting and operating a business.
Most important, work with a local real estate agent or broker that have a high level of experience in commercial real estate. An experienced agent or broker will be well versed on occupancy patterns and the current conditions of the commercial real estate market in the area. This is their bread and butter and they know their stuff. Allow them to simplify the process of finding your perfect location.