Franchise Tip #7: Selecting a site for your operation is probably the most important business decision you will make as a franchisee. Be thorough, patient and don’t settle for a B location when you can get an A.
There is a science to site selection. Research is necessary, along with collection and analysis of data. You will want to know the population within a certain radius of your unit. You’ll want to know traffic counts along the major roads that border your business. And you’ll want to take notice of the other businesses surrounding your location. You’ll be looking for those that attract the same demographic that you want to attract. End caps of strip malls are always suggested and are necessary for any sort of drive-through operation for food service.
Franchisees seem to offer more advice on site selection than on any other topic and it may vary according to the type of franchise. This post will deal strictly with food service and we will cover non-food franchises in a subsequent post.
“Site selection is probably the most important part of the process. Without the right location you’re going to fail,” said Jim Kolzow, a Panchero’s Mexican Grill franchisee in New Jersey.
His first store is located in a shopping center with a few other restaurants and boutiques. The corporate office would have liked him to locate near a major retailer, which would provide traffic for his restaurant, but it settled for a trade off once Kolzow pointed out some features as a resident of the area. There are two high schools in close proximity, as well as a hospital, a sports training center for the Philadelphia Flyers and Philadelphia Soul, and, perhaps most importantly, one of the highest-grossing Rave cinemas in the country. Those things compensated for the lack of a major retailer.
Most franchisors have a real estate executive or team to help with site selection and they are there to help you make the best choice. However, if there are things you know about your market as a resident, you have an advantage.
One franchisee took a counter to his location before leasing and hand-counted passing cars with a click to be sure traffic counts were accurate. Another franchisee advised visiting your potential location at all times of the day and night. If traffic is busy at lunch but dies down for dinner, it might not be the best location.
Most franchises will recommend that certain conditions exist, such as specific population numbers and density around a location, to make sure a store will succeed. Often there is a high-low range. Greg Costley, a CiCi’s Pizza franchisee, advises potential franchisees to consider another location if the actual population figures are at the low end of the recommended range.
“When you move outside of a major metro area, population density is a major thing to consider,” Costley said. “Knowing the minimal population that would support a unit is very, very important. But I wouldn’t be playing with those minimal numbers. You want to be in a substantially populated area with a higher population density.”
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David Pierre, who is a multi-unit Orange Leaf Frozen Yogurt franchisee in New England, says while traffic counts are important, a franchisee has to look at the bigger picture.
“Don’t get sold on the fact that there are 50,000 cars driving by every day,” Pierre said. “That is not a formula for success. Look for locations that have other features: restaurants, bars, coffee shops. Make sure there is another attraction for people and you have an instant audience.”
Other things to look for while scouting locations are visibility for signage, easy ingress and egress, and pedestrian traffic generated by neighboring businesses. Finally, sufficient parking space is also important.