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Choosing a Franchise Location for Optimal Success

April 30, 2024
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Choosing a Franchise Location
Buying a franchise business is a great way for you to get ahead in life. A franchise offers entrepreneurs and investors an opportunity to get into business, become their own boss, and build a financial future. Because franchise businesses are typically part of a widely recognized brand with established operating procedures and focused training, they are ideal for entrepreneurs with limited resources who are getting into business for the first time. Because franchises are already established, there is less leg work involved in set up and operation, and the help a franchisor receives from a franchisee is invaluable. One of the most important keys to the success of your franchise business, however, is finding the right location. Here's how you can choose a franchise location for optimal success.

Who Chooses the Franchise Location?

In many cases, the location of a franchise is already established. The location of your franchise business weighs in heavily on the success or failure of your franchise. The reasons for this, for the most part, are obvious. With such an emphasis placed on the importance of location for your franchise, you might expect the franchisor to take a large part in helping you select a prime location for your franchise business. After all, your success is their success. According to an Entrepreneur article on choosing a great franchise location, " . . . most franchise systems assume you'll do most of the legwork in terms of locating a prospective site based on the selection criteria they have provided." Many franchisors have a specific set of criteria they expect potential franchisees to adhere to when choosing a location for their business. Many franchisors reserve the right of final approval on the location of a franchise business.

Unless you've attached yourself to a poorly run franchise, odds are good you will have a great deal of input from the franchisor regarding the location of your franchise. Since you will be licensing the right to use a brand name, operating procedures, products, trademarks, and other creative property from the corporation you're buying into, that company will have a vested interest in the location chosen for your franchise business. In many cases, a franchisor might have an obligation to other franchise owners regarding territory. Some franchise agreements guarantee their franchisees certain territories and agree not to allow another franchise owner to establish a franchise within that territory. This is part of a non-compete clause that helps ensure maximum success for each franchise owner.

Franchise Territory

Factors that Affect the Viability of a Franchise Location

Demographics, population, and layout of the surrounding area are just some of the factors that figure into the selection of a franchise location. Affordability of rent and taxes for the area are other factors. Sometimes there are contractual obligations that could require the franchisee to pay a range of fees that include property maintenance, local taxes, permits, and insurance. While these fees are typically going to be required anywhere you open a franchise, they may be higher in some places than others. These are issues many franchisors will be willing to help with, but you will be expected to do a great deal of the research on your own.

Another factor in determining the best location for your franchise is visibility. Depending upon the type of franchise you have, having major roads and highways near your franchise can be a big determining factor in the success of your franchise, particularly those franchise businesses that rely on a steady inflow of customers. If you aren't visible or convenient, there's a good chance your franchise business will suffer. That's why it's important to weigh the benefits of a location with the rent you'll be paying. Slightly higher rent for highly-visible territory may make the higher rent worth it in the long run.

The businesses and landscape around your franchise are also important. If you open a franchise somewhere that thrives on seasonal business or tourists, you could be making a mistake. Factors like the economy might affect business when tourists aren't spending money freely, and during off seasons, you will likely experience slumps. Are the profitable times enough to sustain your franchise when business is not so good?

Choosing a Good Location for Your Franchise

The success of your franchise is important. You wouldn't go into business to fail, so why wouldn't you take every measure to ensure your success. Finding the right location for your franchise is one of the best ways to start your franchise off with the best chance for success. You've heard the old saying, "location is everything." That couldn't be more accurate. The right location for your franchise will be the difference between success and failure. So having a strategy in place to help you pick the perfect location for your franchise is crucial. Here are some things you can do to help you choose the best location for your franchise:

Franchise Locations
  • Consider the characteristics of your franchise and its target customersThis is the first thing you need to do when picking a location for your franchise. Different franchises will thrive better in certain locations. Restaurants and other franchises that rely on traffic will do well near business districts where rent might be more expensive. High visibility is essential to the success of these types of franchises. Franchises that don't rely on walk-in business can get away with paying less rent in less populated areas. Examples of these include cleaning franchises or any other service franchise that travels to the customer.

  • Know local laws and standard business practices of an areaTowns and cities have their own laws regarding how businesses can operate. There might be excessive taxes that can affect the bottom line of your franchise. Some municipalities may even restrict certain types of businesses. It's important to understand the legalities, permits, and expected business practices of any municipality before you decide to open a franchise in the area.

  • Know your demographicsEven if you have to pay for a professional company to gather the information, learn the demographics that make up the community where you want to open a franchise. Knowing the social structure and statistics relating to the population and the various ethnical groups within a population can help you pinpoint the customer base you're looking for, or help you steer clear of a customer base that won't be of any value to your business.

How to Get Started Choosing the Right Franchise for the Right Location

Maybe you already have an area in mind where you'd like to open a franchise. How do you find a franchise that would thrive in that location? The answer is simple. All USA Franchises is a franchise database with one goal—to bring together entrepreneurs, investors, and franchisors. At All USA Franchises, we are on a mission to list all of the 3000 plus franchises in the United States. Franchisors are always welcome to list their franchises, and since we never charge for listings, all of the franchise listings are available to be viewed all the time. Other franchise directories show you franchises that pay for premium views. At All USA Franchises, you can search franchises by industry or search franchises by investment, allowing you to narrow down your search to those franchise opportunities that suit your lifestyle and passions. No other franchise directory provides the largest selection of franchises like All USA Franchises.

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