Why Top Franchises Make Location a Top Priority
In business, finding the right location is equally important to offering the right product or service. Both are critical to your success. But what should you consider when deciding where to set up shop?
These criteria may help you decide whether you should go all in or go running in the opposite direction.
- The area’s key demographic aligns with your ideal customer base. Look at the surrounding neighborhoods of the location you’re considering. Do the people who reside there align with your target audience? One easy way to determine an area’s demographic is to leverage online population databases, such as city-data.com. It can also give you a gauge of household income, which is important to ensure that your product’s price aligns with what your target market is willing and able to pay for it.
- There’s consistent . Some franchises depend on foot traffic to generate business. For example, if you owned a Fast-Fix Jewelry and Watch Repairs® franchise, you may bring in customers who didn’t actually drive to the mall specifically to get their jewelry repaired. But a mall-goer might see your store on the way to another department store, remember that she’s been wanting to get her wedding ring reset, and decide that today is the day to do it. If you are, in fact, considering a mall location, ask your prospective landlord for the traffic count, as well as for the average dollars per square foot generated.
- It’s located by complementary – not competitive – businesses. If you’re considering a mall or shopping center, look at the store directory. Thoroughly assess the stores that would be located nearest to you. Are they potential lead generators, such as a jewelry store or a jewelry department within a larger store? Or, would they be competing for the same business as you? If the latter, it could be an uphill battle not worth pursuing.
- There isn’t a high turnover of businesses. When you walk through the mall or shopping center, do you see a lot of for-lease signs or store closing sales? If so, these could be red flags that tenants either aren’t profitable or aren’t happy with their existing arrangement. You might consider asking managers at the stores nearest to your prospective location what their experience has been like with the location and the landlord.
- The cost of rent is within industry averages. Similar to comparing your top franchise companies before choosing one, you should also compare rent for different locations. Make sure to read the fine print, too, as some landlords may require you to pay them a percentage of your gross sales, in addition to your base rent. Unless the location truly warrants it (i.e., it’s in a higher-end mall that allows you to also charge more for your services), you might want to keep looking.
Choosing a franchise location is an important decision that shouldn’t be rushed. It’s likely to become a second home for you so the more you enjoy the space, the more your customers will, too.
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