There are a lot of factors that go into making a franchise a winner, chief among them is matching the right opportunity with the right entrepreneur. Of course, the location will also be key.
For some opportunities, you’ll rely on the expertise of the franchisor. The better ones will have a set of “site criteria” that helps new franchise owners identify what locations are right — or wrong — for a business. A franchising organization’s ability to provide this kind of guidance is one measure of its competency.
The franchisor and you will likely take into consideration these four key factors when determining the best location for your franchise:
- Location Visibility
Franchises that depend on drive-up or walk-in customers for impulse buys are the ones most in need of a prominent, highly visible location. This is one reason why so many quick-serve restaurants are clustered near access roads to major freeways. Of course, almost any franchise can benefit from drop-in business and brand awareness that comes from an easily seen location. If your franchise is difficult to see, you’ll lose the foot traffic that’s often key to operating a successful business. Potential customers will drive or walk right on by!
- Site Accessibility
Accessibility is closely related to visibility. Prospects not only need to see your franchise; they must also be able to get to it easily. Pay attention to nearby traffic flow and timing. A location that can be readily accessed during non-peak times could become a nightmare to reach during rush hours. Also, recognize the requirements of your staff. If they need to leave your site for sales, service or delivery runs, a location that’s well located can pay dividends in customer satisfaction and worker productivity. No one wins if your delivery driver is consistently stuck in the heavy traffic that surrounds a poorly sited franchise!
- Nearby Competition
This is a consideration with two, competing schools of thought. If you are the only business of your type for miles around, you might expect to get more business than if a direct competitor has established themselves on the next block over. For example, a coin-laundry franchise might not prosper if several others are located nearby. But, then again, the benefits of a busy location can often overcome some of the challenges posed by nearby competitors. Recalling our first example, many quick-serve restaurants thrive when concentrated in a single area. Consumers are drawn to it knowing they’ll have a wide variety of choices.
- Traffic Generators
If your franchise depends on walk-in customers, it’s often a good strategy to “piggyback” on the popularity of a neighboring business. Within a shopping center, an “anchor” destination like a department store, drug store or grocery store can help attract the volume traffic you’ll benefit from! That said, be wary of highly popular neighbors. If your franchise is one for which customers frequently pick up or drop off items, your livelihood will be threatened if others command the most convenient parking spaces.
And, if you’re acquiring a “resale” franchise?
You may be realizing your dream of business ownership by purchasing a franchise from a retiring owner. If so, the site will have been “pre-selected” for you and you’ll want to think long and hard before relocating — even if a better site beckons or an advantageous lease deal is offered elsewhere. Moving is costly. What’s more, you’ll risk losing the clientele the previous operator has built up over the years, which is precisely your benefit from purchasing “pre-owned!”
