5 easy ways to snap up the top sites
How can you be sure to pick the top spot for your franchise business? How do you know you are paying the right price?
When it comes to securing a site for your franchise opportunity, it pays to do your research. A great business model in the right location can generate sales and build a healthy revenue for the franchisee, however poor site seleection can damage the brand and your wallet.
Here are five things you can do to make sure your locations suits your business, your demographic and your model.
1. Understand the brand’s customer base
A passion for the brand you are about to invest in needs to be balanced by clarity about who the customer is, why he or she buys the product or service, and the best way to deliver it.
Consider whether the demographics of the locale you are researching has a home-grown demographic that meets the business needs, or whether customers will be travelling to the destination. If so, can they easily access the outlet? Are there neighbouring businesses that will attract and keep your target customer?
2. Review customer traffic flow
There are statistics available from shopping centres on their traffic flow, but nothing beats being on the ground and observing for yourself when and how customers access a business, whether or not they purchase, and the length of time they spend on site. It’s worth investing the time to do some solid research on this.
A seemingly top spot can reveal its weaknesses when you look at whether or not customers are drawn to the business or walk straight past – and why.
3. Evaluate rental costs
If all the research points to a good position for the business then it’s time to number crunch. On top of the rent there may be initial fitouts to pay for.
Landlords can be flexible over costs and can offer rent-free periods, for instance, but it’s crucial to take an objective view on whether or not the costs can be easily met by the business you will be operating.
4. Check lease terms
It’s ideal if a franchise term and lease agreement coincide. Investigate the lease renewal terms, any extra costs, and what you will have to make good when you leave the business. Will the landlord demand refurbishment of the site after a number of years? If so, when is that due? If this is a brand new site, will the landlord’s demands on how the outlet looks fit with what the brand requires?
5. Seek advice
Turn to the experts for help in picking the right site. Many franchisors will want to be involved in the site selection or have a team that can suggest appropriate locations.
There are leasing agents who can help negotiate good rental deals. Lawyers and accountants can review the relevant documents and offer feedback on the viability of any deals.
Other franchisees within the brand might also offer their tips on why their locations work – or why they don’t – and how to avoid paying too much for a site.