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Factors That Affect a Good Franchise Site Location

Written by: Sebastien Page

Article Overview: Once you have selected a franchise you would like to buy, you must consider a number of factors to ensure your success in managing that franchise.

Factors That Affect a Good Franchise Site Location

Once you have selected a franchise you would like to buy, you must consider a number of factors to ensure your success in managing that franchise. One of the absolute most important factors in successful franchising is location. A great business in a poor location may be unable to turn a profit, and your franchise could become a losing endeavor.

How do you analyze your location to see if it will bring you success? The first factor to consider is the size of your city. If your city is simply not big enough, and is not likely to grow any time soon, you will not be able to sell enough products to turn a profit on your franchise, or even break even. You must also consider the size of your customer base. If you are catering to a small segment of the population, you must live in an even larger city in order to have the largest possible volume consumed.

Another important thing to consider is the location and routes that the customer you are catering to uses. You must know the target demographic of your customer and be able to capitalize on that using location. You want to put your franchise business on a route where your customer is likely to go, and to shop. If your target customer is wealthy, you want to keep your franchise business in an area of town where wealthy people shop, perhaps near stores with similar target demographics.

In addition, you will want to locate your franchise near related businesses in order to draw the maximum possible customers. If you are opening an office supply store you will want to be located near schools and offices in order to serve those customers and be most convenient for them. They will dictate where you locate your franchise business.

Employees are another important consideration. You want your franchise to be accessible to possible employees because otherwise you will have difficulty hiring and maintaining a quality staff, and consequently, quality service.

Lastly, consider the competition. You do not want to locate your franchise right next to a business that is a direct competitor. However, at first, you may be useful to locate your franchise near a competitor so that your customers are aware of your service and may defect to your business rather than your competitor’s.

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Article Tags: business employees, customer base, endeavor, franchise business, important factors, office supply store, poor location, population, quality service, quality staff, segment, target customer, target demographics



Related Forum Posts
Critique Small Business - Well, several things come to mind for me and is dependent upon the type of busienss (home based/ internet, brick and mortar). Being in the business financing field the first thing that comes to mind is business plan...Particularly, business history, financial plan/ projections/ budget as well as your present market and competition.... And lest not forget the three L's...Location, Location, Location!
Re: Enticing Franchises - Top 9 List - All Franchise listed above are in millions of dollars. Do you have the list of Franchise in thousands
Re: Info for would be franchisers... - [quote="Sebastien":1d29sdv1]Like Franchise Times, Franchise Update is a very practical magazine. There is no blah blah, just straight facts that anyone in the franchise community can relate to. I just want to mention that all these magazines are NOT franchisee oriented. I mean these magazines are for franchise professionals. If you're looking to buy a franchise, you won't find much information in there. To answer your question, getting published in Franchise Times was fairly easy. I don't want to brag too much but I think I am known in the franchise industry. I was the marketing guy at Franchise.com for a few years before joining my new company, the World Franchising Network. So people know me and I have a very good relationship with Nancy Weingartner, the Managing Editor at Franchise Times. I was talking with her at the last Franchise Expo South in Miami and she mentioned she'd like me to be profiled. I was like "ok, sure!". I like this franchise executive profile thing in Franchise Times as it is rarely BS. People are usually really natural in there.[/quote:1d29sdv1] Thanks for the follow up Sebastien! And I can't say that I'm surprised that networking with the right people and managing your relationships with them properly are the keys to being published. I guess the old adage holds true of "it's not who you know, but who knows you" that's important.
how much for a franchise fee? - Dear Colleague There is no easy answer to this question. Things to consider: [list=] The sizeof the Franchise Clent base Expected Turnover Intellectual Property costs (recoup) Number of Franchises Number of employees Original Set up costs Franchise admin costs An example: A franchise that I was involved in setting was to a simple "lawn mowing/home repair" franchise. The Franchise included national/local advertising - preparation of client lists - general admin - central accounting etc The Franchise involved 300-500 clients - and an annual turnover of about $300,000 . The annual franchise fee was $30,000. Hope that this gives you some idea Take care Ian[/list]
Re: Franchise Surveys - Another good tool to researching a franchise is to speak with their existing franchisees. This contact information is included in most Franchise Disclosure Documents. In order to get a Franchise Disclosure Document or FDD as it is often referred to, you will have to complete a basic franchise application. The franchisor will then usually provide you with the FDD at that time. Included in that book of information is a list of the existing franchisees, the contract, the investment information etc... This information is required by Federal Law to be disclosed to your prior to making a purchase. So be sure to do your research and start with the Franchise Documents to get the initial information.


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