How the COVID-19 Pandemic Changed the Rules Around Choosing the Right Franchise Location

Choosing the right location for your franchise can have a huge impact when it comes to pulling in target customers and generating revenue. But in a post-COVID world, what does choosing the right location mean? What’s changed since March 2020?

The global pandemic has changed the priorities of many people in the UK. With time to think and reassess, and greater awareness of health and personal safety, it’s no surprise that consumer trends across all industries have shifted. For example, there’s been an increased focus on the importance of sustainability in the home improvement sector. 

These value changes have also impacted what goes into selecting the perfect franchise location, as you’ll discover in this article. Here’s how the COVID-19 pandemic has changed the rules about what makes a good location for your business:

Why does franchise location matter?

When you become a franchisee, choosing the right location, usually with the support of your franchisor, will be at the top of your to-do list. When you’re making this choice, it’s important to first determine exactly why the location of your franchise unit matters. Here are just a few reasons why starting a franchise in the wrong space and place could negatively affect your business...

• You could be attracting the wrong kind of customer – If you’re a business that operates out of a storefront or retail space, and you rely on footfall to make your money, you need to be sure that the area demographics in your chosen location line up with your customer base.

• You could be inaccessible to the right kind of customer – Again, if people need to visit your location to engage with your franchise, you need to be certain you’re not cutting off potential customers. Is your location easily accessible via public transport links? Is it walkable from a variety of places?

• You could be attracting the right customer at the wrong moment – Where you’re placed will determine when most people pass your franchise unit, and you should pay attention to this as you consider locations. If you’re an events franchise, for instance, you’re not necessarily looking to pull in customers during their morning commute. But if you’re a coffee shop franchise, this might be perfect.

• You could be spending more than you need to on property rent – This is the biggest question to ask yourself in the wake of COVID-19: Do you need to be in the centre of a city or the middle of a high street? How much of your business actually comes from footfall, and are you spending more than you need to on renting a space in a popular area?

Selecting a business location after the COVID-19 pandemic

The acceleration of e-commerce throughout the globe over the course of 2020 was hard to ignore, as consumers shopped online often out of necessity, and brands were forced to rapidly change their strategies as a result.
—Lizzy Hillier, Econsultancy

In the last year, the online shopping sector has seen a huge boom, and consumer habits have changed. In March 2021, the amount spent online was up 11.6% from March 2020 - accounting for 34.7% of retail sales compared to 2020’s 23.1% [Office for National Statistics]. For many franchises, this change has meant an increase in online presence, and a decrease in revenue generated by face-to-face service.

Paired with the increasing use of delivery services in place of eating out, the importance of a central location seems to be lessening in post-COVID times. In a recent Point Franchise webinar, Rooster Shack founder Imran Mamud and Seeds Consulting franchise consultant Matteo Frigieri discussed these changes.

According to Imran, “Sales in QSR are only going in one direction, and that’s up. We’ve enjoyed a 40% year-on-year increase in the first two months of 2021 and it’s clear people are changing the way they buy and eat to suit QSRs. People are now eating in but want the quality they’d get when eating out — and that’s exactly what Rooster Shack offers.”

Matteo added to this thought and got specific about how newer franchises and businesses might have an advantage over established units, as they won’t be tying themselves into expensive, unnecessary rental rates. 

[Being created in the post-pandemic normal] gives new brands an advantage because they don’t have to pay premium high street rents simply to attract customers and have designed their business models with delivery services in mind. They’ve been able to establish a true local market presence and take advantage of the opportunities that exist in every neighbourhood.
—Matteo Frigieri, Seeds Consulting

How to choose the right location for your franchise

Now you know how COVID-19 has rewritten the rules about franchise locations, you’ll have some choices to make, and some pros and cons to weigh up. With these curated tips, you’ll be able to choose the right location for your business with ease…

1. Learn your industry and your franchise like the back of your hand

Seek out all the information that you can. Some sectors of business will benefit much more from a traditional “ideal” location than others, and the best way to figure out where your business fits in is to look at existing examples and concrete data.

2. Create an ideal customer profile, and learn everything you can about this ideal customer

Just as knowing the demands of your industry and your particular company will help you to determine the best location for your franchise, so will getting to know your ideal customer as well as you can. Market research is your friend.

3. Communicate with your franchisor

In most cases, your franchisor will play at least some part in helping you to source your location. Absorb all the knowledge and expertise that they offer you, and be sure to bring up changing post-COVID consumer demands during location negotiations. Don’t forget that you might benefit massively from the connections of your franchisor when it comes to negotiating rental rates and securing cheaper deals on property.

4. Consider the future of your franchising journey

Take some time to consider what you’re likely to want in three years, or five years, or ten. In terms of your broader location (the city or town you’ll be based in), what will work in the future? If you’re looking to grow and become a multi-unit franchisee, for example, you’ll want to base yourself in an area where this will be possible.

When you’re running a franchise, the right location can change the game

Once you’ve chosen the right franchise location and gotten everything up and running, you’ll be working hard to create a profitable franchise. Once you’re turning a profit, you might start looking at further expansion options like master franchising. Development opportunities are always available in this varied and growing industry, and every day is another adventure. Keep up with the latest sector trends and announcements via Point Franchise’s news articles.