Buying a franchise is only one step in turning your vision of a profitable business into a reality; you must also choose a location. If your franchise isn’t in the right area, you’ll struggle to attract customers and generate sales. So, how exactly do you choose the best location for your new franchise?
Connect With the Franchisor
One of the first things you should do after buying a franchise is talk to franchisor. He or she can provide invaluable guidance on selecting a location for your franchise. They’ll go over key information such as the business’s target demographics, average sales order, ratio of new versus returning customers and more. And in many cases, franchisors have specific criteria that franchisees must follow when choosing a location for their business. Failure to follow this criteria could present legal problems later down the road, so talk with your franchisor for more information on choosing a location.
Identify Nearby Franchises of the Same Business
You should also determine how many franchises of the same business are located in a particular area. If you buy a franchise and open it in an area with a half-dozen other franchises of the same type, there’s really no incentive for customers to choose your business over an existing business. The other franchise businesses have already established themselves, making it difficult for your franchise to attract customers and grow. Therefore, it’s recommended that you choose a location with few to no other franchises of the same type nearby.
Compare Lease Prices
Leasing a building or storefront is the biggest expense for many franchisees. Just like home prices vary from location to location, however, so do lease prices. To lower your overhead and improve your chances of success, compare lease prices of prospective locations. Keep in mind that some franchisors have specific rules regarding leasing. As explained by Entrepreneur, the franchises Signarama and EmbroidMe won’t allow franchisees to lease space that requires percentage rents. Again, you should talk with your franchisor to find out what, if any, rules you must follow when choosing a lease space.
Visibility and Accessibility
Ideally, you should choose a location that’s easily visible and accessible from a major road. If customers are forced to drive down several back alleys in some obscure part of town to reach your franchise, they’ll probably think twice before returning. You can expect to pay more when leasing space in a highly visible and accessible location, but it’s a smart investment that pays off with more customers.
Tax, Zoning and Regulations for Franchises
Finally, consider tax, zoning and regulations when choosing a location for your franchise. Most cities require businesses to purchase a permit, and they also require them to open their business in a commercial zone. Check with the local city planning office to find out what’s required to start a business.
If you buy a franchise, you must choose the right location. Rather than opening in your franchise in the first available building you come across, follow the tips listed here to increase your chances of success.