There are a few factors relating to your franchise that can make or break you, and location is definitely at the top of that list. Locating your franchise in the wrong place can single-handedly cause it to fail, no matter how many other things you do right. Here are some tips on how to choose a good location for your franchise.
Understand Your Franchise Concept
Before choosing a location, it is helpful to fully understand the concept of your particular franchise. The target customer is the centerpiece of the concept, so it is very important to profile your target customers - where they live and work, where and how they play, and what drives people to the business.
Once you understand the franchise concept and target customer, it is easier to understand the factors that go into choosing a good location. You would no more put an expensive, trendy clothing boutique in the inner city than you would put a thrift shop in a suburban mall. It is important to match the concept with the location if you want it to be successful.
Do Your Research
The next step to choosing the best location is to research the area. When looking at a possible location for your franchise, some important considerations are the following:
--How easy is it to get to the location (and park there)? Can traffic turn into the location from both sides of the street, or does a median prevent access on one side? Is it an out-of-the-way location? Is it visible from highly traveled areas?
--What similar businesses are nearby, and is their location advantageous compared to yours? Just because there's a business like yours nearby doesn't mean yours can't succeed, but it may make it harder to get the market share you need to be profitable.
--Find out what construction projects are planned for the near future. If a similar business is going to be built soon after yours in the same area, that may not be the best location for your franchise to move into.
Use Franchisor Resources
Your franchisor should be able to provide a great deal of help in choosing the best location for your franchise. They likely already have volumes of information about what locations are best for franchises, and some franchisors even have realtor connections and legal help to make the process easier.
"We have the data to understand the market, but we also know what we've done in the past and how our business has performed in different areas," says Tariq Farid, the CEO of Edible Arrangements about choosing a franchise location.
Negotiate a favorable lease
The terms of the lease for the location you want can be complicated and tricky. Having help from the franchisor and/or their legal team can prevent mistakes that can hamstring a new franchise. If favorable conditions can't be agreed upon for a particular location, it may not be the right one even if all the other conditions seem perfect.
This Inc.com Franchise Site Evaluation Form
is useful for analyzing a potential site to decide if it may be a good one for your franchise.
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