The location of a franchise could either make or break the success of a franchise. It is one of the key decisions to plan for while deciding on the franchise contract. These tips to find a suitable location will help you understand the different options that you have to optimize business results while location planning.
Traditional locations are the free-standing units with their parking lot. They are usually buildings used solely for the franchise.
Non-traditional or satellite locations are usually part of a bigger building or structure. For instance, it could be inside a mall, airport, university, gas station or hospital. They also include kiosks and carts.
Visibility is crucial for maximum customer engagement. However, a franchise in a high demand and traffic area might also mean high lease and other overhead costs. Hence it is important to factor in every cost associated with the location when comparing the advantages and arriving at final cost estimates.
Find out the traffic during a typical weekday and weekend for your potential site. Do you know if it is surrounded by schools, hospitals or offices? What kind of businesses exists in the neighbourhood? Is access to and out the area convenient? If you want more information, talk to local commercial real estate agents. They can provide you the general vacancy pattern and an idea of the business landscape in the area.
Specialized software can help model the future performance of franchise units with respect to their specific concept for location planning. For instance, SitesUSA and SiteZeus can drill down into the demographics of an area, even allowing for the mapping of competitors or businesses that will complement a franchise. Other programs allow for the building of “heat maps” based on a certain number of characteristics that have been found to frequently engage with the franchise system. Those heat maps can then help franchisors and their prospective franchisees locate potential market areas.
Leverage on the valuable guidance from the franchisor for location selection and lease negotiations. It is common for franchisors to reserve the right to choose the franchise location before finalizing the agreement to ensure you are on the right track. Some franchise agreements can last for over 20 years. So use the tips to find a suitable franchise location and do not rush with the location planning process. Understanding the location can help you choose the right place for your franchise.
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