Selecting the right franchise location
Category Business brokering
Selecting the right Franchise location
The old saying in property also holds true when it comes to franchising: location, location, location.
Here's our guide to picking the perfect site that will allow you to become a successful franchisee.
Understand the Concept Inside and Out
Firstly, understand the concept of your franchise business. There are many different kinds of franchises, so when you talk about location, your considerations will depend on the type of business you're considering. Urban Link works with a number of franchisors and can guide you on the type of franchise you may be interested in.
Work closely with the franchisor and your broker to find out what makes your franchise business of choice tick, as well as find out what drives traffic to the business? You will need to ask these questions:
- Who are the target customers?
- Where do those target customers live?
- How and when do those customers interact with the concept? (Eg is your chose business a restaurant that caters to the business crowd on their lunch breaks? Or is it an emergency care centre that needs to be close to where people live and in a safe location for late nights?)
- Is it a destination concept? (Do your customers come to you?)
- Does it rely on impulse sales, and so is a highly visible location a must?
- Are your customers coming to you, or are you going to them? (In this case, location is less important and you might even be able to start a home-based franchise.)
Do Your Homework With the Franchisor
In reality each franchisor may have its own specific set of requirements and regulations when it comes to selecting a site location. Everything you need to know should be spelled out in the Franchise Disclosure Document, but those documents can run upwards of 75 pages long. That is when a broker at Urban Link could be especially helpful and guide you through the document.
Good franchisors typically have already done a lot of the market research for you. It's in their best interest to keep track of demographics, and they'll share that data with you. They also have something you might not have as a first-time franchisee: experience. Many franchisors already have people on the ground in various regions, scouting out potential locations, keeping track of commercial development deals, and working closely with real estate brokers such as Urban Link who can advise you on commercial sites available and suited to your franchise of preference.
Talk to Fellow Franchisees
Don't stop at the franchisor. It's a good strategy to solicit input from current franchisees as well to get a sense of the franchisor's management style.
For example, some of those prime commercial development sites might be difficult for a first-time franchisee to nab, because franchisors will want to give their best locations to franchisees with proven track records. That is where your local property broker can be very useful as they will already be familiar with you area of choice.
Carefully Evaluate Your Retail Site
What else makes a great retail-site location? More than half of franchises are retail businesses, and in that case location is especially important.
Study the traffic patterns. Are you on a desirable side of the street. Consider the small details, like if drivers will have to make an unprotected turn across several lanes of traffic to reach your site.
Is there enough parking at your site? Make sure you visit the site at several different times during the day because there could be a popular restaurant in the same shopping centre that monopolizes the parking lot during lunch and dinner hours.
Look out for your neighbours. In a typical suburban shopping center, you'll be sharing the space with a number of co-tenants, so do your research on them.
Competitors: Think about your direct competitors, not just in your shopping center, but also within a close radius of it. Do you out-position them?
The tenant mix: Check out the other tenants in your mall, shopping center, or nearby area. "If you have a child care franchise and you're trying to attract parents and their children, you don't want to be next to a liquor store. Rather, try to find a space with companies that are complimentary to your product or service. If that's hair care, it might make sense to be near a tanning bed or a nail salon.
The anchor store: It could really benefit your business to be near a major store like a Pick and Pay or Woolies, but your strategy shouldn't rely entirely on the biggest tenant of a shopping center to help drive your store's sales. That location could easily close or relocate, or it can even end up hurting you if it's monopolizing parking spaces.
Be financially realistic. In the end, a location is only perfect if you can afford it. Understand the economic realities of your business.
Close the Deal With a Professional agent
Once you think you've got your perfect site, work with a qualified real estate broker such as any of the Urban Link brokers to seal the deal. This is a very specialized science and is a lot more complicated the than looking at the size of the building and the rent. You can expect a good amount of support in the final negotiations from a quality broker who can assist you with the crucial lease negotiation process.
Brokers at Urban Link really represent your best interests and will want to be sure to increase the probability of you being successful.
Author: Urban Link