5 Ways to Select the Best Site For Your Franchise


If your franchise needs to attract walk-in customers, you must select its location with great care. A choice made in haste or without taking every possible factor into consideration can lead to lower than anticipated sales and even business failure.

Every new franchise that performs well owes a large part of its success to its location. Your proposed site must be easy to access. If you expect customers to come by car, you must ensure that there is adequate parking. You must also ascertain that the site attracts the sort of customer that you are targeting.

It is very easy to go wrong with site selection. A neighborhood that sees a lot of traffic may not necessarily be good for your business. Similarly, paying a high rent does not mean that your sales volumes will be high.

What are the precautions that you can take when selecting a location? Although there is no way to be absolutely sure that a particular site is the most appropriate for your business, there are some steps that you can take to avoid making the wrong choice.

1. Study the area

Some franchises need to be situated at a place that sees heavy pedestrian traffic. This is especially true for restaurants and retail stores. If your business falls into this category, you would have to spend a substantial amount on rent. Opting for a lower-priced location that is in an area that attracts fewer people will result in lower business volumes.

But if your business involves a different type of activity, say, selling auto parts to trade customers, it would make more sense to select a site where the rent is less.

If you like a particular location, spend some time at the site and in the immediate vicinity. This will give you the opportunity to observe the level of traffic at different times. You should also make it a point to see how your competition is faring in the area.

If the territory already has a large number of businesses offering similar products, you may find it difficult to attract customers. On the other hand, this could prove to be an advantage as well. All that you would have to do would be to lure customers away from the competition. 

2. Speak to other franchisees

You can gather some very useful information by speaking to other franchisees selling the same product. Try and talk to those who have established their businesses in the recent past. Ask them how they went about the process of selecting a location. The intelligence that they provide can be invaluable.

It will be useful to ask other franchisees about the positive aspects of their location and its drawbacks. You can use what you learn from them to avoid making the mistakes they committed.

Of course, it is important to approach those franchises that are located at some distance from your territory. They should not be your competitors. If they are, they may not be willing to talk openly to you.

3. Don’t exceed your budget

Arriving at the amount that you are willing to pay as rent for your franchise location can be tricky. An expensive location will attract more customers and generate greater volumes of business. This will allow you to bear a higher rent.

On the other hand, a site in an area that attracts fewer people will probably get you a lower number of customers, but it will be cheaper.

Choosing between the two can be difficult. While it may be safer to opt for the site with the lower rent, this is not necessarily the correct choice. In fact, the general rule that you should follow is to select a location with greater potential. The additional sales that you generate will justify the extra expenditure on rent.

But don’t go overboard and lease a place that will stretch your budget. Remember that you are making a long-term commitment. If the location is inappropriate, shifting to a new place will be both expensive and cumbersome.

4. Patience pays

Your franchisor will be in a hurry for you to start operations as soon as possible. The real estate agent who is handling the property that you are interested in will also be keen to finalize the transaction.

Don’t give in to the pressure that is put on you. After all, it is your money on the line. Selecting a property is possibly the most important decision regarding your franchise. Take out the time to check if the location that you have selected will remain as attractive several years into the future. Is there any new development proposed for the area? Verify this with local, regional, or state authorities.

If a new road comes up and blocks access to your site, your business may suffer. Similarly, a new mall in the vicinity may draw crowds away from your location.

5. Understand the legal implications

The lease agreement for the property that you finalize is a crucial document. It is important that you have professional help that you can rely on. Your attorney should be an expert on real estate as well as franchising.

Study the agreement yourself and seek an explanation for the clauses that you don’t understand. Many of the points listed in the agreement will have a financial implication. You must spend time on this subject. If you don’t, you may get an unpleasant surprise months or years later.

Ascertain the costs that you will be responsible for. There will be utility bills and property taxes to be paid. There will also be other expenses like insurance, maintenance, and repairs. It is essential that you know which expenses you have to bear and how much it will cost you on a monthly basis.

Use your negotiation skills

Make sure that you see several properties. Don’t let the realtor or the landlord know your preference. If the landlord realizes that you have made a decision, you will find it difficult to negotiate the rent downwards. You should shortlist at least three or four properties. This will strengthen your bargaining position and allow you to drive the rent down.

The success of your franchise depends to a great extent on the degree of care with which you select a location. You must ensure that you give this issue the attention that it deserves. 

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