How to Find the Ideal Location for Your Franchise

Image by Heather Cuthill

It’s often said that the three most important things to consider when buying a home are location, location, location. I believe it’s even more important when you’re looking for a place to put up your business. If your business is not sited in a place that will draw customers, your business cannot succeed.

So how can you identify a suitable place to open up your business? Do you simply look for a commercial area with a lot of people? What role does competition play when choosing your business location? Are you at "main and main" within the mall or street front?

There are several key factors to consider when choosing a location for opening your franchise:

1. Study the demographics of the area and community. Is this an up and coming neighborhood, or one in decay?

2. Determine the sources of foot traffic. Is there a continual flow of pedestrians nearby? Are the streets laid out for easy automobile access to the site? Is it convenient to public transportation?

3. Evaluate the security and accessibility of the location. Is it easy to find and get to? Is there convenient parking? Can the site be easily seen and from how far away?

4. Analyze the competition. How many other similar businesses are in the neighborhood?

5. Get to know your neighbors. Not only do you need a concentration of customers, but a pool of prospective employees too.

6. Check it against your space, facility and utility requirements. Does it meet the operational requirements of your business? How much remodeling will be required and what will it cost? This is where franchisor approval of the site is critical.

7. Be aware of the local ordinances and zoning policies.

8. Consider possible plans for expansion In choosing a location, think about who your customers will be and where you will most likely find them. In a mall? Near college campuses? Town centers? Or possibly in off-street specialized venues like airports and other transportation terminals, sports stadiums or convention centers.

9. Study what activities typically generate traffic in the area – ball games, movies theaters, retail shops etc. – and how often, the times of day, and the seasons of the year people frequent the area.

Site location isn't brain surgery, but it does require spending some time to think about the factors that can make or break a business. One needs to understand the current business landscape, the demographics of the area, the traffic patterns and as much as possible about future plans for development.

And a little bit of basic math helps, too! Arm yourself with a leasing checklist. Use it to help you compare properties in different areas that you know are successful. Create an Excel spreadsheet to enter the information and create a tool to review the potential of each location. If you already have one location for your business, you can use your current assumptions regarding your existing location to review the proposed site. If you have several locations, then classify your stores first by type, profitability, size, or other metrics, then lay out the distance and drive time data in your spreadsheet.

Many franchisors provide guidance with location selection and lease negotiations; and this can be a big boost to finding an optimal site at the right cost. The more help you get from the franchisor in selecting a site and negotiating a lease, the better your chances at success. Even franchisors who 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.