How to choose the right location for franchise?

You have to address the issue of location before you buy the franchise. Having an exclusive territory in the franchise agreement based on mapping or population density is a great option. 

 

A franchise territory is the area that the franchisee will be given to operate in. The rationale behind having a specific area for the franchise is so there won’t be undue competition for the franchisee when another franchise of the same brand opens in the same city or region. 

 

It is also important that encroachment on your territory is carefully defined in the agreement. For example, the franchisor might agree to not open another store within a fixed radius, but may offer branded products in a nearby supermarket. Know your rights regarding exclusivity and what constitutes encroachment on your region. 

 

If the franchisor does not offer exclusivity then you need to speak with current franchisees to determine how the lack of exclusivity has impacted their franchise sales and profitability.

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Many franchisors provide guidance with  Gap Maps and lease negotiations, This is a big advantage over having to do all the footwork yourself. Since the franchisor already knows from proven experience the right type of location that will draw customers, this is a head start on success. Most franchisors, even if they don’t provide that support, will still reserve the right to approve the location you choose, so at least you’ll know you’re on the right track.

There are several key factors to consider when choosing a location:

  • Accessibility – is it easy to find and get to? Is it on Google Maps?
  • Traffic – is there a continual flow of pedestrians or cars nearby? Are the streets laid out for easy access to the site? Is it convenient for public transportation? Is it easy to park nearby?
  • Visibility – can the site be easily seen and from how far away?
  • Community – is this an up-and-coming neighbourhood, or one in decay?
  • Local competition – how many other similar businesses are in the neighbourhood?
  • Size and layout – does it meet the operational requirements of your business? This is where franchisor approval of the site is critical.

  Other essential criteria for finding the right location are the area’s demographics

 You also have to research your competitors and know who they are, their strengths and weaknesses and of course their products. How close is the nearest similar store, and how well established is it in the neighbourhood?

All of the above questions are analyzed by Gap Maps from the collected data to give the most accurate results on the location of each location, each country you choose. Gap Maps shows the busy hours of the place, where you choose to do business, and carefully analyzes the competitors in the area you are targeting.

Source: franchisedirect.co.uk

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