Back to Blog

Franchise Essentials: 4 Priorities When Choosing Your Perfect Franchise Location

Mike Mack

If you want your business to generate profit, you need to make sure the foundations are set right. In the case of brick-and-mortar business, that foundation is the physical location of your business. Your success or failure practically depends on this. One might be tricked into thinking “oh come on, I am about to open a McDonald’s, everybody loves it. All I need to do is just find an affordable location”. Well, try opening a McDonald’s in a vegetarian neighborhood. You know what will happen? RIP profits.

Choosing the right location is trickier than it seems at a glance. That’s why it’s important to think about a few key aspects when making your final decision, especially when rent soaks up a huge chunk of your overall costs.

Your first step

Before you even begin looking for a location, have a meeting with your franchisor and ask for help. This is important for a number of reasons:

  • Your franchisor has data and research – Typically, if a franchisor is doing a good job, they probably have lots of statistics and research to provide you with. This will be invaluable for you in terms of understanding your target group of consumers.
  • It’s in their best interest to help you – Even though you will be running a separate business, your success or failure will have a pretty big impact on the franchisor’s business, brand reputation and overall bottom line. If anything, they should be willing to help you succeed.
  • They have years of experience – Your franchisor is technically running the same business and most probably, much longer than you (considering you are just about to start). This means they have experience and knowledge in stuff that really matters, including information on how to choose a good location for your franchise. Use that to your advantage.

After you gather as much helpful information as you can, it’s time to prioritize your next moves.

Priority number one – customers

Let’s make something clear. Any business on our planet strives to satisfy their customers. They are the cornerstones of your profit and practically dictate your every move. But to satisfy your consumers with a brick-and-mortar business, you need to actually be in a spot that is convenient for them to visit. Otherwise, all your efforts are wasted.

Your first priority would be to answer this question:

“What are the areas that my consumers are most focused at?”

Take a map of your city and mark all the locations with a marker. Focus on those areas and absolutely disregard the rest. Whatever you do, you need to choose a location that is inside the marked areas. This will help save time when looking for a suitable location, because you can neglect a lot of potential areas that may seem good, but are pretty much useless for your franchise.

Priority number two – infrastructure and accessibility

Again, this is dictated by your target group of consumers. Depending on their demographics and preferences, you will get different answers. For example, your customers might be professional people with high income. This means that they most probably have a car. Well, if they have a car, better choose a location with a nearby parking lot.

On the other hand, you should take the traffic of your city into account. For example in NYC, traffic jams have become a part of everyday life, which leads to most people (including wealthy people) choosing to travel by subway. In this case you may want to think about a location which is close to a subway station.

Or you may be operating in a territory where traveling is largely done by bikes. So then the parking lot becomes less of a priority (unlike secure bike park racks), and the distance that an average person needs to travel to reach your franchise location will be more important.You get the idea. In the end it all comes down to knowing and understanding your customers. Once again.

Priority number three – Analyze your competition

This is where things become tricky. In general, a territory where your competitors operate successfully isn’t a good bet. They are already doing a good job at satisfying their clients, which are basically the same people that you are targeting. What are the chances you will be able to win them over? Probably not that high, and even if you do, it might take months. Months you don’t actually have to spare.

But in rare occasions, this can be a good thing. Some brands hold more value to people than others and they might be using the services of your competitors simply because your franchise isn’t available at the location that is comfortable for them. Then suddenly, competitive environment becomes an advantage as you may be able to convert a large number of customers and make them your own.

This traces back to market research and analytics, which you should have acquired from your franchisor. Carefully analyzing the data will give you an idea whether you want to have competition around you or not. If no such data is available or it’s a matter of survival, it might be best to stick with “better safe than sorry” approach: choose a location with the least amount (ideally, none at all) of competition possible.

Priority number four – Future changes

This is the last thing on your list, but it’s no less important. The only bad thing is that you might not be able to get ahold of this information every time.

Ideally, you want to find out as much as you can about your location area. This will help you figure out what possible opportunities/threats you are likely to face in the future. For example, how likely it is for your competitors to consider operating nearby after a while? Is there a new shopping mall project going on? Are there any construction plans in place? etc.

The last thing you want is a big project involving a construction of a large building near your location, which directly translates into noise, dust or in other words – inconvenience for customers. Also remember the competition part: it can be both good and bad for you. And of course, shopping malls can be great, since they will drive more people to the area, some of which will probably be a part of your target group. More clients – more business. You can find a lot of resources at the local newspapers, city planning departments, Department of transportation (for road extensions and improvements) and even the chamber of commerce.

I want to stress this again: choosing the right location for your franchise is the most crucial part. It may very well mean the difference between failure, struggle for survival or huge success. Gather as much information and data as you can and invest as much time as needed into this matter.

It’s pretty simple – if you want a profitable franchise, make sure your location and surroundings are working with you, not against you.

Here’s another article that you might like: How Geo-analytics can Improve Your Business

Share on social media: 

More from the Blog

How to make your own territory and store locator using an API

We all know how important it is for customers to be able to find your locations. And with the advent of technology, there's no excuse not to have a territory and store locator on your website. But what if you don't have the time or resources to create one from scratch? In this blog post, we'll show you how to use available code and an API to easily create a web-based store locator. Not only will this save you time and money, but it'll also allow you to fully customize your store locator to match your brand perfectly. So let's get started!

Read Story

3 steps to make a competitor's territory work for you

Making territories is hard, especially in unknown markets. To help plan your post-Covid growth strategy here is a handy way to create sellable territories today.

Read Story

Benefits and Features That Franchise Owners Ask for in Mapping Software

When it comes to territory mapping, franchise owners are looking for software that is quick and easy to use. I often hear them say how important it is to store the company’s data on the cloud so that team members can collaborate, reach agreements in shorter times, and ultimately put the right information at the franchisee’s fingertips.

Read Story

Never miss a minute.

Get information that is relevant to your business
We will never share your email address with third parties.