Do-It-Yourself Site Selection for Your Franchise

Site selection is a key factor in your franchise’s success. Your franchisor may have an in-house real estate person or a team to help you. But even with the assistance of the franchisor, there’s no substitute for getting out there and doing some legwork on your own. After all, you’re the one whose profits will soar, stagnate or even plummet based in large part on the location you select.

Here’s a closer look at what you can do on your own to make sure you’re choosing the right site for your franchise.

Step 1: Researching a site for your franchise

Get a map

Market planning starts with understanding in-depth the area where you’re going to locate your store, so get a detailed map with all the streets, not just the major highways. You’ll need colored pens as well. If you’re technically proficient, a laptop and a mapping software can be great tools, but it’s hard to drive around and scribble on your laptop. You may be better off using an old-fashioned map and notepad for the car, then entering the field data you jot down into your computer once you get home.

Start driving

Go to all the major shopping centers, schools, and business parks in the areas where you’re considering locating. Mark them on the map. Don’t take the freeway or shortest routes—travel the surface streets. Along the way, you’ll start getting a feel for each area, even the ones you think you already know. Locate any existing stores operated by other franchisees in your system as well, and then mark the locations of any competitors. These can be direct competitors, but don’t overlook other competitors in your category, such as supermarkets and sit-down restaurants if you’re a quick-service food concept.

Assemble the data

Claritas, Gale Business: DemographicsNow, and PolicyMap are examples of demographics firms you can buy information from, but there are free resources, too. The U.S Census Bureau’s website and your local Chamber of Commerce are two good ones. You want to understand who lives in the area surrounding your potential store location—the trade area, as it is called. Things like income levels, number of people per household, educational level, and daytime employment are important numbers to have in your evaluation. Traffic counts are important, too. You can get these from the city or county traffic engineer.

Reassess

Now, get back in the car with your map and drive through all the areas again, armed with all this new information. Does your experience verify what the data say? Is this an area with a lot of children? (Important if you’re a day care center; not so important if you’re an automotive aftermarket retailer.) Good places to double-check are schoolyards and grocery stores.

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Step 2: Narrowing down a specific site for your franchise

Once you have pinpointed the area you want to locate in, it’s time for step two: narrowing down a specific site. In this phase, you’ll want to consider these factors:

1. Retail synergy

Fancy words for “you want to be where everybody goes shopping.” This may be the most important criteria of all. Even if you’re a destination retailer—one that people go out of their way to find—you’ll still do better if you’re somewhere that everybody goes three or more times per week.

Visibility

This is probably the second most important factor, because if customers can’t see you, you’ll have to spend a lot more money in marketing to tell them you’re there. If your sign is clearly visible from the street, you’re halfway there.

Access

If customers can see you, but can’t easily get to you, you’ve got a problem. Here you need to consider such things as street medians, left-hand turn lanes, traffic signals, and the number of driveways in and out of your site.

Parking

Some would say this is the most important factor in choosing a site. You can be where everybody goes, have great signage and visibility, and have multiple access points—but if there’s no parking, you’re dead. And don’t forget to consider when you need that parking to be available. There may be lots of parking after work each time you driven by the site, but have you checked it out at lunch and on the weekends?

Franchise site selection: No substitute for do-it-yourself research

In site selection, there is no substitute for driving the streets and doing your own research. By combining the data you gather with the information and advice that your franchisor’s real estate team provides, you’ll have a fuller picture of all the pros and cons of each location—and be well armed to make a good decision.

About the Author

Jeff D’Arcy has served as a real estate executive with high-growth companies such as McDonald’s, Payless ShoeSource, and Blockbuster, and is now an active consultant for franchisees and prospective franchisees in evaluating franchise concepts and selecting the right location.