A Guide to Choosing the Perfect Location for Your Franchise
In most cases, location is key to business success. If you’re working to establish the most successful franchise possible, you'll need to work out the optimal premises for your franchise unit. Here, we take a look at six factors you need to consider if you're going to make the right decision.
1. Location and image
Though it’s not always obvious, most successful businesses carefully consider how their location and specific business premises reflect the brand image they intend to portray.
When it comes to general location, businesses need to be aware of the reputation of the area they're moving into. For instance, if you're considering opening a new coffee shop that's got an artisanal/hipster vibe going on, you probably want to open in an up and coming neighbourhood, where rents aren't too high, but there's a large market and enough footfall to support your business. In other words, a trendy café needs to set up in a trendy neighbourhood.
In terms of the specific property you trade out of, it’s necessary to consider how the building itself reflects your brand image. Are you trying to portray your business as classic, elegant, and chic? You’re probably best suited to a historical building with plenty of character and ornate embellishments. Want something a little edgier, underground, and industrial? It may be a good idea to look at old warehouse spaces.
While the examples offered above are a little exaggerated, they reflect the importance of location on your franchise's image and reputation. Your chosen building should enhance and complement your image, not detract from it.
2. Whom are you targeting?
Demographics are important. As we've already mentioned, there's no point in establishing a business in a location where there's no demand for your product or service. However, the importance of how close your target audience is to your business premises will vary from business to business.
For instance, if you operate in a niche market, where customers are likely to travel specifically to purchase your services or products, proximity may not be too much of an issue. For retailers and many other service providers, proximity to the target market is absolutely essential.
It's also important to consider how stable the local community is. Is it a wealthy area with plenty of disposable income? Is it overly dependant on a particular industry or job provider? If so, an economic downturn could severely impact their spending power. Is there a healthy pool of potential employees? Does the area have access to the resources you need to run your business? There are a thousand and one demographic issues to consider, so take the time to do some thorough research.
3. Access, parking, and foot traffic
How your customers intend to reach your business will determine where it should be placed. If individuals in your target market are likely to be car owners, you have greater freedom but need to consider things like traffic, parking, and loading/unloading spaces. If your target market is likely to utilise a different form of transport, you’ll need to be located close to the relevant transportation hub. Convenience is key. It’s also important to consider disabled access, stock delivery, and whether certain times of the week are likely to be more or less busy than others.
4. Surrounding businesses
The businesses surrounding your new franchise premises can have a big impact on its success. They have an effect in two distinct ways. These can be broadly described as positive and negative effects.
The negative effect is fairly self-explanatory. If you have competitors too close to your location, your business will generally suffer. There are exceptions to this rule – for example, businesses in an entertainment complex or food hall – but most franchises will want to avoid exposing themselves to too much competition. Not only will a competitor syphon off a certain percentage of your custom, it will also increase your marketing spend as you'll have to work harder to attract clients.
The positive effects surrounding businesses can have on your franchise are evident on high streets, shopping centres, and industrial estates around the country. By locating your business alongside others with a similar clientele, you’re likely to increase the traffic moving through your store. There are also other intelligent pairings to consider when setting up a franchise. For instance, restaurants benefit from being close to entertainment businesses, such as theatres and cinemas.
The history of the building you intend to utilise as your business premises can help inform you as to whether you’re making a good decision. If you’re opening a restaurant in a building that’s previously been home to five failed food businesses, you may want to consider the fact that there’s something inherently wrong with the location. Likewise, if the previous business was a success, try and work out what made it a success and whether those reasons are applicable to your own enterprise, and can be replicated.
6. Planning regulations and infrastructure
An intelligent franchise investment is one that’s supported by a great deal of research, preparation, and planning. The same goes for selecting a business premises. One of the biggest mistakes business owners make when choosing a location is not looking into planning regulations and general infrastructure issues.
If you move into a building only to find that you can’t develop it in the way you want because of local planning laws and building protections, you’ve wasted an incredible amount of money. If you move into a building and can’t install the equipment you require because of infrastructure issues, you’ve lost even more. In order to ensure that nothing’s going to stand in your way, make sure you enquire into local ordinances, zoning restrictions and, if possible, find the blueprints for the building.
As you can see, a lot of thought needs to go into picking a franchise location. Franchisees need to take into account their brand image, key demographics, access issues, competition, the chosen premises history, and any planning regulations or restrictions that may be in force. Failure to do so could impact heavily on your chances of success.
The Editorial Team, Point Franchise ©
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