Guest Post: Location, Location, Location -- A Key to Franchise Success

This is a guest post from Chad Cohen, VP at Fish Consulting on the role real estate plays in a small business’ success and how franchisees and franchisors need to work together.

Franchising has many inherent benefits as far as business models go. Good concepts have tried and true systems in place that have been developed to drive brand recognition and customers through the doors. But before you can take advantage of that brand equity, you have to figure out where in the community you’re going to plant your business.

Most seasoned franchisors will have real estate teams to guide you through the process, but there is plenty to consider while scouting locations on your own. Simply owning a franchise does not guarantee success, because the old business adage still rings true: it’s all about location, location, location.

The type of franchise business you’re in ultimately determines where your business should be located. A sub shop attracts a different customer than a tanning salon, so you’ll need to work closely with your franchisor to understand who your customer is and what drives traffic to your location.

Any good franchisor should have its own specific set of requirements when it comes to site location and should have quantifiable market research about the city where you plan to operate. Most have relationships with brokers and development groups who are in the field continuously scouting the best locations. After all, it’s in their best interest to keep track of these demographics and real estate trends. And if they don’t have this information, then you might want to take a step back and take a hard look at the business you’re potentially getting into before signing the franchise agreement.

However, you should not rely solely on a franchisor’s input. Do your own research. Talk to existing franchisees, network with the local Chamber of Commerce, and gather feedback from potential landlords. Arming yourself with as much information as possible will allow you to make the most informed decision. But don’t stop there. Go to a potential site and study the traffic patterns, make sure there is enough parking, shop other retailers in the area to see what business is like and who their customers are. If you’re looking into a strip center or similar real estate option, take a look at the tenant mix and see what the competition looks like. Understanding all of these nuances will allow you to make the best decision possible.

In the end, information is the name of the game when it comes to choosing the right franchise location. You have to do your due diligence and determine what is the best fit for the brand you’re investing in. Slow down and make sure you know what you’re getting into because one of the keys to business success will always be location, location, location.