Determining the desirability of a particular location for my franchise? - VF Franchise Consulting
VF Franchise Consulting

Determining the desirability of a particular location for my franchise?

Michael H. Seid, Managing Director
Kay Ainsley, Managing Director
MSA Worldwide

No doubt at some point you’ve heard that the only thing you need for success is Location – Location – Location. A bit simplistic, because unless you are committed to having a great operation focused on the needs of your customer, you can have the greatest location in the world and still fail.

To be successful, every business needs a mixture of:

When you begin to look for that perfect location, you need to first understand what type of locations will work for your business, and which ones won’t. Your franchisor should be able to provide you with the site criteria required for your particular type of business. A knowledge of which types of location and at what cost works for the brand is what separates great franchisors from the rest of the pack. Well-established franchisors have experience, not only in different markets but also in locations that vary in size, shape, surroundings, and customer draws. They should be able to provide you with not only the site criteria, but also give you training and access to the network of local brokers who can assist you in finding the right location. When making your franchise selection, talk to the existing franchisees in the system and see how helpful the franchisor was in getting them the right site for their businesses.

What makes a great site varies from business to business. If your business requires customers to come to you, than visibility and ease of accessibility will be important. However, if you are a service business and you go to the customer’s home, then parking spaces for your cars and trucks, warehouse space, loading docks, and access to highways will likely be the more important variables. You need to consider what your location will do for you.

Overall cost is also an important consideration. If your business plan allows for $15.00 per square foot space and the available space is $30.00 per square foot, you are going to need an enormous increase in customer traffic to justify the increased price. Also, if you need only 2,000 square feet, but the space you find is 4,000 square feet, even if you can get the space for half the price, is bigger necessarily better? Maybe not. A 2,000 square foot restaurant that is full will look busy and be attractive to customers and the neighborhood place to eat. At 4,000 square feet, it may look empty and less appealing

You need to understand some of the basics of how to evaluate real estate:

The above are only some of the criteria your franchisor will likely discuss with you. Your franchisor should be able to provide you with information on the type of location you should be looking for.

Finding a great location can seem daunting simply because many of the great sites have already been taken. But, if you understand what you need and work with experienced commercial real estate brokers and your franchisor’s real estate staff, you will limit your risk and hopefully quickly select a location that meets your needs.

Keep in mind that in most cases, when a franchisor “approves” your location they are only verifying that it meets their minimum criteria. They are not guaranteeing that you will be successful in that location or telling you that there are not better locations in the same area. Those decisions are yours along to make. Do your homework carefully.

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