How to Choose the Best Location for your Franchise

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When considering the location for your franchise ensure that you have set aside enough time to complete the research thoroughly, as the location can make or break a new business. As with any type of business you need to be in an area that has potential to bring in sales through the target population without being stuck in between too many competitors or hurdles that will ultimately make your business fail.

Location Customer Demographics

Firstly, you need to create a profile which you can define as your perfect customer type and, the more detailed this is, the better. Once you have this, you can then consider the criteria to define the demographic data you are interested in. For example, if you are considering a high-end Automotive franchise, then the average salary would be more useful than straight population figures. This is because population figures could include a large block of low income apartment buildings which wouldn’t be in your target market, whereas a high-income area would have the expendable cash you would require for your business to strive. When you have defined your profile and the criteria you are interested in, then you must conduct thorough market research of all the possible geographical areas you are considering. Some questions to consider when completing this research could be:

  • What is your target customer profile?
  • Where does this customer profile live?
  • Why would they go to you, over any competitors in the area?
  • Would you travel to them or do they need to come to you?

Franchise Territory

Your Franchise Territory will be agreed in the Franchise Agreement and will be the area your franchise will operate within. It is best to have an exclusive territory but this isn’t an option for some franchisees and if this is the case then speak with other franchisees in close proximity and ask how this has affected their sales.

The franchisee will most likely be required to make the final approval of any site selection and this authority makes the franchisee liable for the performance in that location. It is imperative to conduct your own research of any pros and cons within any potential area. It is important to note that the Franchisor does want you to secure the correct location, as well as if you are given to small of an area, they won’t receive as much ongoing profit and If given to large of an area it will mean missed opportunities due to the inability to fulfil all the locations potential.

Franchise Location Details

Every Franchise will require different features from a location; for example, a Vending Machine Franchise that services different offices in a specific geographical area, needs to consider travel time in the analysis but doesn’t require a high footfall to maintain a good level of business. Each location will have its benefits and drawbacks but you must consider them as a whole and analyse what is most important for your chosen franchise. The Location details you must consider are:

  • Competition

    • How many businesses are in your local area that are your competitors and where are they located?
  • Transport

    • Are there good public transport links to/in your area?
    • Does your site have convenient access for automobiles?
    • Does your location support access for larger delivery vehicles?
  • Public/Community

    • Is there a large flow of footpath pedestrians?
    • Is the community prospering or in decline?
    • Do local events take place near of your location?
    • Is it easy to find and visible to footpath pedestrians?
  • Operational

    • Does your location have the features to fulfil the operational obligations such as large car park for employees or transport vehicles?
    • Does the location building require remodelling to be operational for your franchise requirements?
  • Legalities

    • Does the location have the planning permission required for your franchise building?
    • Does the building comply with Health & Safety, Fire, Building regulations required?

If you are unsure about any of the requirements for your franchise then check with the franchisor as they should be able to give you guidance on any of the above questions.