Choosing a winning site for my brand requires a lot of experience, but above all proper preparation in statistical and financial matters so that I can determine what makes a place good or bad. Science, art or luck? A little bit of everything. The three pillars of a successful point of sale are having a successful concept, efficient operation and convenient location; Today we will focus on talking about the latter.
Choosing a location is the second most important decision in the life and success of a franchise. Choosing a franchisor is always a difficult task, but another essential part of franchise success, and perhaps even more important than the first, is choosing a suitable location to install the business and proudly display your franchise brand. At Marquee we can have a very good concept, we can have a great brand, we’ve implemented a selection process concessionaireBut if we don’t evaluate and decide on a location that doesn’t fit the right negotiating characteristics, the company won’t be successful either. franchise. Choose a place It’s part science and part art, there’s intuition, there’s technology, there methodologyThere is the brand, the good franchisor, but oftentimes what determines the success of the business is the place or location where I will install the business; No matter how much you work on the previous items, if the place is average, too expensive, or the conditions are not right, the business will not work.
There are three essential characteristics for site selection, the first related to demographic aspects, the second related to financial issues, and the third a contractual issue to be reviewed; Once we have these three characteristics, the site should be approved, like never before, no matter how good it is. Site selection for each module requires a specific methodology that takes into account various factors. It’s not about a place that looks good, a pretty square or a popular street, it’s about having a professional study done on the site to determine if it is suitable for consumers in the specific business you are going to invest in. It’s not the same as placing your franchise in a fast food area, in a transit area, in a shopping center parking lot, at street level, on the second floor on a public highway or in a small service yard; It is different moments to buy with different clients and most importantly, different amounts of investment and income.
You don’t need to be a big brand to choose a location like the big chains, i.e. in an organized manner, just as being a 400 unit company doesn’t mean they will never make a mistake in choosing a location. a franchisor The professional has a well-defined site selection strategy – which has a detailed guide – that includes studies of available spaces carried out by the operator’s staff or a specialist firm. This may represent an additional expense in the initial investment but is a reduction in risk. Don’t trust franchisees who tell you they choose locations based on their “expertise”. Ask for advice because you are not an expert in finding work places. We know that most franchisees leave this very important task to the franchisor when they should be doing it, and it seems irresponsible to me to leave such a complex task to someone with little or no experience for that matter. Check out who will help you make this important decision, the position of the franchisor team and the experience they have in handling and negotiating leases.
Who decides the location? Franchisor or me? I’ve heard annoying people so many times, they say to me… Well what do you care if I rent that place, it’s my money and I want to invest it there and if I fail it’s my money or not, okay? The location decision will always be up to the franchisor as he remembers his last name will be out on the curtains. Ok me and bad my local or vice versa? Ultimately, the question is which is better: having a good site with a bad franchise, or a good franchisee with a bad site? In my opinion, I think a bad grantee will always be superfluous in any franchise system, on the other hand, a better grantee in a non-standard location might be able to drive the business forward, but it would take a lot of work.
In his book The Website Book. A Field Guide to Valuing Commercial Real Estate”, Richard M. Finker, Ph.D. who has devoted more than 20 years to studying the factors that lead to success or failure in selecting business locations; tells us of his 10 Safe Ways to Pick a Bad Location, which I translate below:
1. Insist on a “great” location because it’s close to home, even if the demographic says otherwise
2. Poor strategic location selection
3. Forget the basic concepts of traffic, visibility and accessibility
4. Counting in the wrong place, outside the site being evaluated
5. Choose a site next to a landfill, vacant land, or a lower demographic threshold
6. Choose a site where competition can easily bid
7. Recent entry into a highly competitive area
8. Being happy without analyzing why there are no competitors in the area
9. Choose a location in an area that has different business hours than yours
10. Ignore demographic data that indicates a population profile is not compatible with a customer profile a job
Good locals are out of sight and out of the newspapers. To get good places, you can’t limit yourself to searching real estate listings and directories. A good place is rarely posted, all companies are looking for it and before it is necessary to post, they already have rental offers. Use your social skills and help yourself with contacts, acquaintances and professionals to find those buildings that are about to be vacated and those that are under construction. Finding a good niche takes time, dedication and patience, but you will never regret investing in this search when the company has the necessary flow of customers. Another option is to find someone who is doing a bad job, question them and, if you can, fire them. There are companies that are seen as poorly sponsored in the league away, no people, etc. Find the owner and offer to leave in exchange for a money transfer; You will be amazed to see that the landlord, who can no longer manage the business, and who owes three months’ rent, will think that God himself has sent you with him to lead him out of trouble, which for him was a burden to you. It is the place of life.
Do not exceed the allocated budget. No matter how good the building is, it is not appropriate for you to exceed the budget set by the franchisor for the rental item. His experience tells him that you will not be able to pay higher rent at the prices and sales volumes that are being handled. It can be a very good place to be, but if the rental isn’t business-friendly, it’s like choosing a bad place. You need the franchisor to provide you with a rental range between the minimum rent that is paid to the maximum rent that the business can pay. Every city deals with different rents and needs a parameter to evaluate the buildings against. A place inside a shopping mall may look alluring due to the movement of people, but such movement can be deceiving because one thing is the traffic and another is the cost to the attendees. Check with the franchisor if being in a plaza or shopping center has been successful for other franchisees, what kind of plaza they are in and what rent they pay. Within the boxes, maintenance fees and additional services to be paid such as advertising or weather must also be taken into account. They all add up to the total rent you’ll eventually pay. Remember to factor in your rental expectations for the building you’re considering to see what impact this will have on your results.
I hope this weekly column is useful to you and your business. Remember to visit my Youtube channel”franchiseWhere you will find a wide range of business, franchising and entrepreneurship issues. Listen to me on LA FORMULA DE LA FRANQUICIA on FB every Wednesday at 7:00 pm. cdmx. Interested in franchising? Ask FranchiseZar and #notedejessoprender. Your friend the Franchise Czar tells you Bye, see you on the next one.
