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How to Choose a Great Franchise Location

Franchise & Small Business Resources

Once the prospective franchisee has decided upon a franchise company that is likely to provide a good rate of return on his or her initial and ongoing investment, the time has come to select a site location for store operations to be carried out in. While it may be possible to find a franchisor that involves working from home, the predominant franchise locations in existence today require a store front with a certain number of square feet to be leased by the franchisee in order to facilitate the operations of the retail, restaurant or other capacity of the new franchise.

The majority of the quality franchisors in the market today will provide a clear outline of what they are looking for in their franchisees' site locations. They do this, primarily, in order to ensure the success of the franchisees and the company as a whole. Based on the findings from a long list of criteria, franchise company experts are able to determine what the most effective and profitable type of location would be. Items that are often high on the list when weighing prospective sites' value include density of population, general ability to be seen by traffic - both automobile and pedestrian, depending mostly on the type of franchise involved - and how easy it is for customers to park at the selected site. Also, the volume of parking availability is very important to franchisors.

Other features that are important to franchisors are ones that tend to fall into categories that are often less considered by individuals opening up their own businesses. This comes from having a larger, more institutionalized approach to demographics analyses. For many franchisees these criteria give an added boost to find the best sites and are put into the mix as a way for the franchisor companies to optimize the site locations eventually chosen by their franchisees in order to produce the best possible net returns.

One of the location features looked at by the franchisor is the environment around the potential store. What types of businesses surround this possible new location? Future franchisees should expect to receive a list of ideal shop neighbors which balances the low competition aspect of surrounding stores with their relevance to the franchises products and services. For instance, an ice cream franchise would probably not do well in a shopping center where one already exists. (Indeed, it would probably be difficult to get this one past zoning). Yet the franchisee probably would do a lot better if his or her store opened up right next to a burger stand. Provided that the neighboring burger stand does not sell its own ice cream, this would provide a perfect option for customers interested in desert after their lunch or dinner hamburger.

This "neighbor" factor is especially relevant, of course, in malls and shopping centers where there is a lot of potential competition or complementary stores. New franchisees will quickly come to appreciate the benefit of having a large institution such as their franchisor run the analyses of which locations are most ideal. It saves a lot of time and helps get business off the ground.

However, when choosing a location for the new franchise it is important to realize that the franchisees are - for the most part - expected to do most of the work involved in searching for the site. While franchisors are more than willing to help their new franchisees out by providing optimal criteria in the form of location requirements, their role usually does not exceed this.

Now, once the franchisee has found a site - or a number of sites - which seem to fall under the franchisor-specified requirements, the next step is to get approval. Franchisors - the better ones, at least - tend to be quite careful about what locations are approved. They want to see both their franchisees and their company thrive. Many will find that they are required to send in descriptions and photos of the prospective franchise site locations.

Once approved, the leasing shall begin. At this point it is almost always advisable to seek the aide of a qualified attorney in order to see the franchisee through the process of lease negotiations. In addition, franchisees working with quality franchisors should expect a certain level of support from these companies. At times this can come in the form of a suggested lease packet which may or may not be accepted by the landlord. On top of this, it should be remembered that a good franchisor should have a good track record with real estate negotiations.